Activision Blizzard had a record-setting 2018, so why did they just lay off 800 people? The full lowdown from their latest earnings report.
Activision Blizzard ( NASDAQ:ATVI) have released their Q4 results for the fiscal year ending December 31,2018, and frankly, what’s happening with the company can be a bit difficult to wrap your head around. At first blush, it would seem to be good news – Activision Blizzard had a record-setting 2018, bringing in $7.5 billion in revenue, up 6 percent year-on-year, and $1.81 billion in net income, way up from $273 million in 2017. Q4 revenue was $2.38 billion, above Acti-Blizz’s guidance of $2.24 billion, and earnings per share were $0.90, above guidance of $0.64.
Despite this, Activision Blizzard CEO Bobby Kotick proclaimed the company had performed “below potential,” and indeed, they did fall short of Wall Street expectations of around $3 billion in Q4 revenue and earnings per share of $1.28. Why analysts were expecting numbers so wildly above Acti-Blizz guidance is anybody’s guess. Despite the record year, Activision Blizzard announced they’re refocusing their business and laying off 8 percent of their workforce (700 to 800 people).
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A major reason for the refocusing, layoffs, and general downer tone of Activision Blizzard’s earning call is the company’s rather stark 2019 outlook.
