Blizzard Entertainment Cuts 600 Jobs
Activision Blizzard Inc. (NASDAQ: ATVI) maker of World of Warcraft announced Wednesday that it would cut 600 employees from departments not related to its game development teams.
Blizzard, a subsidiary of Activision Blizzard said in a brief statement that 90% of the jobs being affected are not related to game development. The cuts follow a review of the company's needs. The jobs represent 8.2% of the total workforce at the California-based Activision.
"Constant evaluation of teams and processes is necessary for the long-term health of any business," said Blizzard co-founder and chief executive Mike Morhaime in a statement.
"Over the last several years, we've grown our organization tremendously and made large investments in our infrastructure in order to better serve our global community. However, as Blizzard and the industry have evolved we've also had to make some difficult decisions in order to address the changing needs of our company."
The layoffs will not impact the scheduled release of the company's upcoming game titles including Diablo III, World of Warcraft: Mists of Pandaria, Blizzard DOTA and StarCraft II: Heart of the Swarm. Blizzard is planning to announce a release date for its anticipated sequel Diablo III soon.
"I also want to emphasize that we remain committed to shipping multiple games this year, and that our development teams in particular remain largely unaffected by today's announcement," Morhaime, wrote in a blog post.
The company did not say what types of jobs were affected but according to an analyst from Sterne Agee the cuts could have stemmed from World of Warcraft's lessening subscriber base.
"Their subscriber base for World of Warcraft is getting smaller, so they are adjusting their cost structure for that decline," Arvind Bhatia, an analyst at Sterne Agee, told the New York Times. He also added that the company was likely cutting jobs in its customer service department.
Blizzard's best-selling title World of Warcraft has been losing subscribers in the last few years. The online game saw 12 million subscribers who pay around $15 a month at its peak in October 2010 but the number fell to 10.2 million as of December 31, 2011. Hard-core fans of the title have migrated to other online games and it's also seeing competition from free online games.