A sizeable round of job cuts in Irvine is unlikely to have much impact on the local space needs of Blizzard Entertainment Inc., the online video game publisher whose collection of area properties now makes it Orange County’s largest office tenant.
Blizzard’s parent company, Santa Monica-based Activision Blizzard Inc. (Nasdaq: ATVI), last month announced a well-publicized round of layoffs across its operations, affecting about 8% of the company’s total workforce, which stood at 9,900 employees as of the start of 2019.
State records filed this month indicated that 209 of those cuts would be in Irvine, where Blizzard had employed nearly 2,000 workers as of late last year.
It’s the largest reported round of job cuts at Blizzard’s Irvine office, which has been based in the city since its founding in the early 1990s.
The maker of “Overwatch,” “World of Warcraft,” “Hearthstone” and other online gaming franchises is OC’s largest software company by employee count.
Local cuts are largely focused on marketing positions and jobs pertaining to the company’s Overwatch franchise, according to industry trade reports.
While user levels remain high for Blizzard—with about 35 million monthly active users in the quarter—the company exited 2018 with “softness for its in-game revenues that will take time to stabilize and return to growth,” Activision Chief Financial Officer Dennis Durkin said last month.
These factors “will weigh on Blizzard’s financials this year,” although going forward, the company’s “pipeline of PC, console and mobile content is richer than ever and we expect a significant addition of development resources to accelerate the pace of delivery over time,” he told analysts.
Company officials suggest the jobs will eventually be replaced locally with positions in different areas of focus, with an emphasis on content development.
“We have two big goals going forward,” added Blizzard President J. Allen Brack, who took over the top spot at the Irvine campus last October.
“The first one is, of course, make excellent video games. The second is to find ways to deliver more content to our player communities,” Brack said. “To meet these goals, we need to work to increase the amount of content that we’re delivering.
“That investment in development talent has really required us to make some difficult trade-offs,” primarily being the reduction of non-development positions, he said.
The cuts are “a top-five career-difficult moment for me personally. But we’re committed to doing everything that we can to help get us into a good position going forward,” he said.
Tops Broadcom
Real estate sources tell the Business Journal that there’s been no reports of imminent givebacks in space that Blizzard leases in Irvine—a collection of buildings in the Spectrum area of the city that has grown in size over the past decade, and in the past year or so overtook chipmaker Broadcom in terms of total square footage leased here.
Blizzard now leases 721,000 square feet in Irvine, according to Activision’s latest annual report, which was released in February.
It’s the first time that Activision has broken out specific square footages for its Blizzard operations in regulatory filings; prior Business Journal reports estimated the company’s collection of buildings in the 600,000-square-foot range.
The disclosed square footage figures appears to make the video game firm No. 1 among office tenants in OC, in terms of total space leased.
Broadcom, which once occupied nearly 900,000 square feet locally, has cut back its local operations the past few years after being sold and its corporate designation changed to San Jose. It now leases about 661,000 square feet at the Five Point Gateway campus near the Orange County Great Park.
Blizzard’s Irvine operations are the largest of any Activision unit by square footage, according to the annual report for the $33 billion valued company.
Non-Blizzard divisions of the company occupy about 475,000 square feet of leased space elsewhere in California, New York and Wisconsin, while another division occupies 210,000 square feet in Spain.
Blizzard’s local campus, the bulk of which is near the intersection of Alton Parkway and Laguna Canyon Road in the Spectrum area, has grown at a rapid clip over the past decade.
Newport Beach-based Irvine Co. owns the game maker’s gated, three-building main collection of buildings, the 235,000-square-foot Alton Corporate Center campus, where the company’s been since 2007.
Blizzard also leases roughly the same amount in several buildings across the street at the Irvine Oaks office campus owned by Newport Beach-based Olen Properties Corp.
The past two years has seen the company snap up additional chunks of space at other nearby buildings, such as 15253 Bake Parkway, a 65,000-square-foot office about three miles from its main campus.
