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General: RTSGuru | Why Has Blizzard Laid Off 600 People?

SBFordSBFord Associate Editor - News ManagerThe Land of AZPosts: 16,596MMORPG.COM Staff Uncommon

In a year when BlizzCon is canceled, and games pushed back, the editors of RTSGuru.com speculate why Blizzard let 600 people go yesterday, including around 60 developers. Check it out!

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Associate Editor: MMORPG.com
Follow me on Twitter: @MMORPGMom

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Comments

  • DauzqulDauzqul Detroit, MIPosts: 1,402Member Uncommon

    40 billion last year? $40,000,000,000

    Layoffs should always be a last resort. Moreover, most of the workers that were layed off were low-cost "tech support".

    Imagine 600 people at $14 per hour. Before taxes, each employee would probably average around 2240 per month (before taxes).

    It would cost Blizzard between 16-17 million per year to keep those workers. That is nothing when we are talking BILLIONS in profit.

    What a shame. Trash company.


     


     


     


    This tells me that they are not confident in their future games, e.g., Diablo 3, Titan, future of WoW, etc.

  • JPaterson84JPaterson84 Toronto, ONPosts: 11Member

    Originally posted by mmoDAD

    40 billion last year? $40,000,000,000


    , future of WoW, etc.




     

    $40,000,000,000, yes. However, that is revenue. What did we learn in the school of common sense? Profit < Revenue. Or, to read it differently, Revenue > Profit.

    Blizzard made $40,000,000,000 in revenue, NOT profit.

    Layoffs happen. They suck. C'est la vie.

    Freelance writer, majority of work in the video game and entertainment industries.
    http://www.jpaterson.net/

  • CeridithCeridith Toronto, ONPosts: 2,980Member

    Originally posted by JPaterson84



    Originally posted by mmoDAD



    40 billion last year? $40,000,000,000






    , future of WoW, etc.










     

    $40,000,000,000, yes. However, that is revenue. What did we learn in the school of common sense? Profit < Revenue. Or, to read it differently, Revenue > Profit.

    Blizzard made $40,000,000,000 in revenue, NOT profit.

    Layoffs happen. They suck. C'est la vie.

    Blizzard still makes a ridiculous amount of profit, regardless of the current slump.

    600 people lost their jobs so that profit could be "maximized" for shareholders, which results in bigger bonuses for upper management.

    So sure the stock price might go up a bit more, and the execs make off with a fatter bonus check at the end of the year... meanwhile 600 people are left trying to find another way to pay their bills.

  • JPaterson84JPaterson84 Toronto, ONPosts: 11Member

    Why pay those 600 people, if those people do not have much to do, and struggle to accomplish things at work, when you can delegate other people to cover the work? The article touched on that as well, calling those people "dead weight". If you had a business where you were paying three people $1,000 a week to do the same job, but two of those people far outperform the third with no added stress or hassle, would you keep that third person, who isn't contributing near as much, or would you be writing a layoff letter?

    Blizzard is a business, bottom line. You know what else is at the bottom? Dollar. You've got to keep your investors and shareholders happy.

    As Gordon Gekko once said, greed is the essence of the evolutionary spirit.

    Freelance writer, majority of work in the video game and entertainment industries.
    http://www.jpaterson.net/

  • htiger23htiger23 Ames, IAPosts: 113Member

    They made $4.755 Billion in revenue...

    Source: http://investor.activision.com/secfiling.cfm?filingID=1047469-12-1775&CIK=718877

    Edit: Comment Removed - The correction has been made.

  • JPaterson84JPaterson84 Toronto, ONPosts: 11Member

    Thank you for that link, htiger23.

    Had I felt bad for the people to begin with, that link would've made me feel less bad.

    Freelance writer, majority of work in the video game and entertainment industries.
    http://www.jpaterson.net/

  • TweFojuTweFoju Saitama & Jakarta ( current )Posts: 1,013Member Uncommon

    welcome to the industry

    So What Now?

  • OvumOvum SofiaPosts: 102Member Uncommon
    This is pretty common issue here in Europe. Why have two employees when u can manage one of them do the job for both. This is the future.

    Music is the science of manipulating people trough sound.

  • thexratedthexrated OuluPosts: 1,368Member Common

    In 2011, they had net income (profits) of $1b, which is fantastic considering their revenues.

    However, there might be very good reasons why the let those people go. The current state of global economy is one of those. Companies must considering viablility in a long-term. 

    "The person who experiences greatness must have a feeling for the myth he is in."

  • SeshatSeshat New York, NYPosts: 5Member

    Thanks for pointing out the typo in the revenue figure. It's corrected now.

  • KaezKaez Nepean, ONPosts: 80Member
    Investors like layoffs. Fact of business #1. Besides, it could just be trimming the fat. I don't believe this is anything but good business management. It's a shame for the people of course.
  • gilgamesh42gilgamesh42 tampa, FLPosts: 300Member

    >.> oh please they are moving customer support to either india or china its not like its surprising or anything



     

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  • DauzqulDauzqul Detroit, MIPosts: 1,402Member Uncommon

    Originally posted by JPaterson84



    Originally posted by mmoDAD



    40 billion last year? $40,000,000,000






    , future of WoW, etc.










     

    $40,000,000,000, yes. However, that is revenue. What did we learn in the school of common sense? Profit < Revenue. Or, to read it differently, Revenue > Profit.

    Blizzard made $40,000,000,000 in revenue, NOT profit.

    Layoffs happen. They suck. C'est la vie.




     

    I hear you and understand the difference. However, the ultimate point is that they didn't have to do what they did. Not even close.

  • itgrowlsitgrowls newport news, VAPosts: 2,951Member

    it amazes me the number of non-corporate poorly paid people who get on these forums and back up a company that is not only known for extreme greed but a company that didn't have to  fire those employees at ALL at this point and did so anyways. Are people that dumb to think that adding unnecessary unemployed people to the already staggering millions isn't helping anyone especially in a company like this that can actually afford more employees?!

  • tom_goretom_gore TamperePosts: 1,796Member Uncommon

    This is corporatism and Activision-Blizzard, along with EA, are the prime examples of it in the gaming industry. Yes, it sucks and yes, there should be a better way, but that's just how corporations work.

    We're not "backing them up". It's just a brutal fact that if they don't need those employees, they will lay them off. No one will keep an employee they don't need, even if they could afford it.

     

  • daltaniousdaltanious waPosts: 2,144Member Uncommon

    Originally posted by JPaterson84



    Originally posted by mmoDAD



    40 billion last year? $40,000,000,000






    , future of WoW, etc.










     

    $40,000,000,000, yes. However, that is revenue. What did we learn in the school of common sense? Profit < Revenue. Or, to read it differently, Revenue > Profit.

    Blizzard made $40,000,000,000 in revenue, NOT profit.

    Layoffs happen. They suck. C'est la vie.




     

    C'est la capitalism.

  • daltaniousdaltanious waPosts: 2,144Member Uncommon

    Originally posted by tom_gore

    This is corporatism and Activision-Blizzard, along with EA, are the prime examples of it in the gaming industry. Yes, it sucks and yes, there should be a better way, but that's just how corporations work.

     

    Maybe better solution would be lay off ceo's or other leading staff, that are unable to make more profit, that take disastrous decisions, that fail to provide new opportunities, ....etc.

  • OzmodanOzmodan Hilliard, OHPosts: 7,183Member Uncommon

    Originally posted by Ceridith

    Originally posted by JPaterson84




    Originally posted by mmoDAD



    40 billion last year? $40,000,000,000






    , future of WoW, etc.










     

    $40,000,000,000, yes. However, that is revenue. What did we learn in the school of common sense? Profit < Revenue. Or, to read it differently, Revenue > Profit.

    Blizzard made $40,000,000,000 in revenue, NOT profit.

    Layoffs happen. They suck. C'est la vie.

    Blizzard still makes a ridiculous amount of profit, regardless of the current slump.

    600 people lost their jobs so that profit could be "maximized" for shareholders, which results in bigger bonuses for upper management.

    So sure the stock price might go up a bit more, and the execs make off with a fatter bonus check at the end of the year... meanwhile 600 people are left trying to find another way to pay their bills.

    This!  it is always about the execs making more money, the little guys always take it in the ear.

  • Hopscotch73Hopscotch73 DublinPosts: 971Member

    I think that a lot depends on how they handle it. If they're seeking people to take volunary redundancy, and they give a decent package, it may not be the worst thing in the world. I know they're letting 200 go in Cork, for example, but Ireland has BioWare and Zenimax, who are probably both looking for experienced MMO support staff. There are options, at least for their Irish staff.

    I hate to see anyone lose their job, but I'd hope that many of those let go can find something else, and quickly, and that they're given a decent financial cushion while they do so. Blizzard know that there's no way to spin this so it looks good, but they can at least do something right  and push some of that revenue into the pockets of those they're making redundant.

    600 people is an awful lot of 'dead weight', and I cringe to see people referred to like that. That might be the corporate view, but it's sad to see people who spend their days working in support of gamers referred to with a phrase like that on a site that's all about games...

  • Shakes420Shakes420 Marietta, GAPosts: 23Member
  • smh_alotsmh_alot Area 51Posts: 976Member
    I assumed it was just to maximise profit and cut losses in a period of time where they expect to have even less incoming revenues. Nothing unexpected here, but I'm speculating as well.


    What's more reason to frown is how all Blizzard's titles seem to take longer and longer to complete, compared to how fast titles would appear in the '98-2004 era of Blizzard. Have they become lax or has there been a significant talent and brain drain? It makes me recall those documentaries of Atari, where they were on top of the world yet this didn't prevent them from becoming complacent and ultimately led to their crash and fall. Ah well, we'll see I guess.
  • jayartejayarte LancasterPosts: 450Member

    Originally posted by Ceridith

    Originally posted by JPaterson84




    Originally posted by mmoDAD



    40 billion last year? $40,000,000,000






    , future of WoW, etc.










     

    $40,000,000,000, yes. However, that is revenue. What did we learn in the school of common sense? Profit < Revenue. Or, to read it differently, Revenue > Profit.

    Blizzard made $40,000,000,000 in revenue, NOT profit.

    Layoffs happen. They suck. C'est la vie.

    Blizzard still makes a ridiculous amount of profit, regardless of the current slump.

    600 people lost their jobs so that profit could be "maximized" for shareholders, which results in bigger bonuses for upper management.

    So sure the stock price might go up a bit more, and the execs make off with a fatter bonus check at the end of the year... meanwhile 600 people are left trying to find another way to pay their bills.


     

    Exactly my thoughts.  I was quite shocked to see some of the callous remarks on another page discussing exactly this topic.  Becoming unemployed is very stressful, particularly in today's economic climate where finding another job is not always so easy.  And, to me, it's another indication of an economic system which simply does not work. 

     

    Why should 600 people be made redundant when Blizzard is still making massive profits?  Why not trim down the amount which goes to shareholders and execs instead of disrupting people's lives when there is no need?  And don't forget, at least some of the 600 employees who are being discarded so callously will have families which this will impact.

     

    Capitalism and greed go hand in hand, and like lots of other people globally, I'm sick of it.

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