The video game publisher announced Tuesday that it is laying off about 8% of its workforce, or more than 750 employees, as the company undergoes a restructuring that will include initiatives to change what is not meeting expectations and reduce some non-development and administrative expenses. As part of the restructuring, Activision will take a tax charge of about $150 million.
The change is intended to help Activision prioritize its biggest franchises – Call of Duty, Candy Crush, Overwatch, Warcraft, Hearthstone and Diablo – amid increased competition from free-to-play games like Fortnite, and the number of developers working on those games is expected to grow by 20% this year.
The news came as the company reported fourth-quarter revenue of nearly $2.4 billion and earnings of 84 cents per share. While the results were strong compared to previous quarters, they were well below the $3.04 billion in revenue and $1.28 per share earnings that Wall Street had forecast.
The company's CEO Bobby Kotick mentioned several high-level departures from the company in recent months, such as Publishing CEO Eric Hirshberg and Blizzard head Mike Morhaime.
The weak earnings in the final three months of 2018 come at a difficult time for the company. Over the past year, Activision stock has lost 39% of its value.
Last week, Bloomberg reported that Activision was planning to lay off hundreds of employees as part of a restructuring. Kotick explained the cuts on a call with investors, saying it would allow the company to create new content at a faster pace for its most popular franchises, as well as focus on new areas of growth like e-sports and the Battle.net platform.
The business did have some positives, though. Call of Duty: Black Ops 4 outsold Call of Duty: Black Ops III, and Candy Crush Friends Saga helped King gain 268 million monthly active users.
