Activision Tells Investors That Layoffs May "Negatively Impact Business"

Mass layoffs may not have been a great idea.


In the wake of a recent layoffs, Activision Blizzard is warning investors of a potential adverse impact on the company's performance. The SEC Filing features a new header under its "Risk Factors" section that plainly states, "We may not realize the expected financial and operational benefits of our recently announced restructuring plan, and its implementation may negatively impact our business."

During its most recent earnings call, the company announced it would be laying off roughly 8% of its staff, which amounted to hundreds of employees. This restructuring was meant to trim its sails for the months ahead, but it concedes in this filing that the move may not work as intended. After citing factors that are still shifting, like labor regulations and third-party negotiations, it also acknowledges more general uncertainty.

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"Further, there can be no assurance that our business will be more efficient or effective than prior to implementation of the plan, or that additional restructuring plans will not be required or implemented in the future," the statement reads. "The implementation of this restructuring plan may also be costly and disruptive to our business or have other negative consequences, such as attrition beyond our planned reduction in workforce or negative impacts on employee morale and productivity, or on our ability to attract and retain highly skilled employees. Any of these consequences could negatively impact our business."

The note regarding its ability to attract employees or an impact on employee morale seem especially pertinent, given that the company has been sharply criticized for its layoffs--especially as they came alongside the announcement of record profits. The labor organization AFL-CIO wrote an open letter to game developers encouraging them to unionize. That letter posed Activision CEO Bobby Kotick (alongside EA's Andrew Wilson) as getting rich off the hard work of developers. Similarly, both executives appeared on a watchdog's list of most overpaid CEOs, both coming in at more than 300 times the median wage of their employees.

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