Possible negative consequences of layoffs at Activision Blizzard

The publishing giant Activision Blizzard said that there is a possibility that the dismissal of 8% of their employees, announced last month, will have a negative impact on the company’s reputation and income.

In its annual report to the SEC (US Securities and Exchange Commission), published on February 28, Activision Blizzard was forced to warn investors of any risk factors that could affect their finances.

Activision Blizzard said that one of the potential risk factors is that they may not be able to "realize the expected financial and operational benefits" because of their restructuring, during which 800 employees of various branches were dismissed. In addition, the publisher said that the cuts may "negatively affect" the business in general.

Activision Blizzard also says that the cuts off have proven to be expensive, may lead to the dismissal of other employees and can have a negative impact on the performance and morale of the staff as a whole. The company has already allocated $150 million for compensation to employees who have been dismissed.

"In February 2019, we announced a restructuring plan under which we plan to refocus our resources on our largest opportunities and to remove unnecessary levels of complexity and duplication from certain parts of our business," the publisher wrote.

“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 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 massive layoffs at Activision Blizzard forced the potential Game Workers Unite union to demand the resignation of Bobby Kotick, the company's CEO. Kotick appeared with Electronic Arts boss Andrew Wilson on the list of The 100 Most Overpaid CEOs 2019.

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