News of the impending layoffs were first reported by Bloomberg on February 7th, and a source familiar with the matter told Business Insider that employees were left without information for days. Kotaku and Yahoo Finance also published reports based on conversations with Blizzard employees who confirmed the lack of communication as word spread within the company to expect upcoming cuts.
With the layoffs looming, game developers from across the industry began to offer their condolences and commented on the stress and volatility of the video game industry.
Activision Blizzard made the layoffs official on Tuesday, February 12, the same day it reported record revenue and earnings per share for both the fourth quarter of 2018 and the year. Despite the record numbers, the company fell short of Wall Street's expectations for revenue and gave disappointing guidance. As the news broke, many across the video game industry criticized Activision Blizzard CEO Bobby Kotick for boasting about Activision's record revenues as hundreds of people were laid off with no advanced notice.
The layoffs accounted for about 8% of the company's total staff and primarily impacted Blizzard employees in the public relations, marketing, and esports divisions. Activision Blizzard also closed a number of its remote offices, including the Seattle and San Francisco studios of "Candy Crush" developer King Games. Blizzard CEO J Allen Brack said the company will shift its resources to increase its game development staff by about 20%, which will help produce new content faster.
"To fund this investment, we are de-prioritizing initiatives that are not meeting our expectations and reducing certain non-development administrative expenses across the company," Brack said in a memo sent to employees , obtained by Business Insider. "We are also bringing together our regional sales, partnerships, and sponsorships capabilities enabling us to better leverage our talent, expertise and scale."
The layoffs included employees who had been with the company for more than 10 years, and community managers who helped define the culture of Blizzard's massively popular games. While Blizzard said the layoffs were a step toward hiring more developers, people within the industry argued that marketing, esports, and public relations also contribute to the development of games.
As former Blizzard employees revealed that they would be moving on, reactions on social media ranged from appreciation to anger.
The unexpected nature of the layoffs also led to unexpected problems for at least one former Blizzard employee, who revealed that he needed a new job within 60 days to avoid being deported. After asking for help on Twitter, his message was retweeted more 7,000 times.
With hundreds of workers suddenly facing hardship, others within the video game industry quickly mobilized to share potential job openings and opportunities.
While video game publishers like Activision earn billions of dollars each year, video games are still a relatively young industry with regular waves of volatility. As employees become more vocal about the pressure they face across the industry, some voices are encouraging game developers to unionize in order to avoid the sort of massive layoffs executed by Activision Blizzard.
SEE ALSO: Activision-Blizzard, the major video game company behind 'Call of Duty' and 'Overwatch,' is laying off about 800 employees
SEE ALSO: Activision-Blizzard just had an awful earnings report. Here's why now might be a good time to buy its stock.
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