There has been talk surrounding a shake up at Activision Blizzard for a few months now. All of that was confirmed in February, with the company announcing that despite a record financial year, 800 employees would be laid off. Now, Activision Blizzard is warning investors that this could negatively impact its business this year.
As part of Activision Blizzard’s annual Form 10-K report, the company said that financial savings from these job cuts may vary based on local labour laws, contract negotiations and operational requirements. The report also says that there is “no assurance that our business will be more efficient or effective than prior” to the lay-offs.
Any estimates made on future financial performance after Activision Blizzard’s restructuring are “subject to significant economic, competitive and other uncertainties, some of which are beyond our control”.
The company has also set aside a large chunk of cash to compensate laid-off employees. This will include severance packages and other services, including helping affected employees transition to a new job elsewhere.
KitGuru Says: A Form 10-K form is essentially legal coverage to stop potential lawsuits from investors if certain plans don’t work out as anticipated. Still, it is odd to see all of this said now, especially given that Activision let go of eight percent of its overall staff.