Orange County Business Journal

Blizzard to Cut 600 Employees

Chris Casacchia Wednesday, February 29, 2012

Irvine-based online game maker Blizzard Entertainment Inc. plans to cut 600 employees from its global operation for the “long-term health” of the company, Chief Executive and cofounder Mike Morhaime said Wednesday.

The company projects 90% of the affected employees will come from departments not related to game development. It made a point to say that its World of Warcraft development team will not be affected.

“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,” Morhaime said. “Knowing that, it still does not make letting go of some of our team members any easier.”

Blizzard's current development and publishing schedules will not be affected.

The cuts, which amount to about 8% of Blizzard’s companywide employment of 4,700, as of last month, follow a string of recent setbacks.

Blizzard is a unit of Santa Monica-based Activision Blizzard Inc, which is part of Vivendi SA in France. It’s the largest software maker in Orange County, and employs about 1,700 people here.

Blizzard saw revenue of $1.24 billion in 2011, down 25% from 2010, as World of Warcraft and StarCraft games led the way.

Earlier this month the Business Journal reported that Blizzard pared down subscription losses in the fourth quarter for its flagship title World of Warcraft as revenue and operating profits dipped.

It ended the fourth quarter with about 10.2 million World of Warcraft subscribers, down less than 1% at the end of the third quarter.

Blizzard posted revenue of $276 million, down nearly 52% from a year earlier.

The company reported an operating profit of $71 million, down 76% from a year ago.

Blizzard did not release a game last year, which accounts for some of the declines in both sales and profit.

The slight drop-off followed Blizzard’s disappointing performance in the prior quarter when some 800,000 gamers dropped subscriptions, down 7% from the second quarter.

In January the company announced it would skip its regular fan event BlizzCon this year.

It had held the event at the Anaheim Convention Center since the inaugural show in 2005.

It also skipped the event in 2006.

Last year’s two-day event brought about 26,000 fans.

The company earlier this month said in its forecast it plans to launch two “unnamed” Blizzard titles for 2012.

Blizzard told the Business Journal late last year it had planned to launch three games in 2012 for the first time in its history, a claim the company continually touted during its annual fanfest Blizzcon.

The company will announce specific release plans for Diablo III in the near future, and is beta testing World of Warcraft: Mists of Pandaria, Blizzard DOTA, and StarCraft II: Heart of the Swarm, executives said.