Los Angeles Business Journal

Activision Blizzard to Cut 600 Jobs

By Deborah Crowe Wednesday, February 29, 2012

Santa Monica video game publisher Activision Blizzard Inc. on Wednesday said that it is cutting 600 jobs globally from its Irvine-based Blizzard Entertainment unit.

Blizzard makes "World of Warcraft," the Internet video game that is the company's most profitable product, with 10.2 million subscribers as of the end of the year. But the game is seven years old and has seen a decline in subscribers in the last two quarters.

Blizzard Entertainment was acquired from Vivendi in 2008. Activision Blizzard said in the late-morning announcement that 90 percent of the layoffs will not be related to game development. The company said its development schedules for games will not be affected by the cuts, and analysts expect most of staff reductions are in customer service staff.

“Constant evaluation of teams and processes is necessary for the long-term health of any business,” said Mike Morhaime, chief executive of Blizzard Entertainment, in a statement. “As Blizzard and the industry have evolved we've also had to make some difficult decisions in order to address the changing needs of our company.”

Activision Blizzard shares were down 4 cents, or less than 1 percent, to $12.03 in midday trading on the Nasdaq.