Insight on Latest Cycle of Video Game Industry Layoffs

by | Mar 27, 2019, 11:00AM PDT

On February 12th, Activision-Blizzard held its quarterly earnings report wherein CEO Bobby Kotick joined in to tell shareholders the great news of a “record year” at one point, then later dropped the bombshell that they would be reducing their workforce by 8%. For a company that had approximately 9,600 employees in 2018, this means they recently laid off likely close to 800 workers, with more than a quarter of that at legendary local game development studio Blizzard Entertainment according to the California Employment Development Department (as reported by Variety). The largest departments cut were IT, then Marketing and Live Experiences, followed by a global insight department.

If you love watching the Overwatch League, maxing CPM in Starcraft II, dropping cards in Hearthstone, defeating bosses in World of Warcraft, warring in the Nexus or banishing Diablo back to the Burning Hells, some of the people who contributed to the development and support of those interactive masterpieces are no longer working at Blizzard. Massive layoffs are notorious for happening without warning. There are (at least) two strongly opposed perspectives as to the pros and cons of this. One of these perspectives can be compactly examined via the website of Game Workers Unite (GWU), one apropos source of the pro-labor side.

The other (pro-business) side, unless one has experience (or access to people) in positions of upper management or business ownership, can be more complex or difficult to relate to for most. For example, imagine if it were your job to decide the answer to these two tough questions: with Blizzard set to release no new titles in 2019 nor hold its annual set of global “Heroes of the Storm” championship tournaments, what work is there to do for those hundreds of employees? What amount of reorganization or retraining would be viable and good business? Cuts hurt, but not cutting can be worse in the long run.

Organized Labor

When many think “labor unions” and what gave rise to them in modern America, what images come to mind? Soot-covered faces, mine cave-ins, and crippling accidents with limbs caught in machinery may be common responses. With the Industrial Revolution long in the rear-view mirror, the mental picture of unions needs updating. As U.S. child labor laws first passed in Congress 101 years ago, and manufacturing as a major middle class industry has been declining since the 1990s, so too has the outcry for unionization largely dissipated into a faint echo of the distant past.

But despite far more humane working conditions today, it remains true that only through unionizing can strong collective bargaining agreements (CBAs) come into existence. CBAs are a uniquely powerful tool to help level the massive power imbalance between employers and employees. One single worker fed-up with terrible working conditions (e.g., not being able to spend any quality time with their family, physical and mental illness from stress and exhaustion) threatening to not go to work is similar to a small ripple in a pond trying to tip over a rowboat. But if their demands for better treatment are not met, unions can threaten to strike en masse, and such a threat is like a tidal wave swelling to flip over that same rowboat.

Thus CBAs give workers leverage to negotiate for protections against employers to defend themselves against the worst sides of the industry: onerous crunches (working 10-16 hour days for weeks or months, possibly without overtime pay if salaried) or massive layoffs without guaranteed warnings, severance, retraining, or resume and interview training to find new jobs. On a related and positive note, massive credit to Blizzard for having a Career Crossroads program that offers much of these, softening the blow and rate of terminations–such a thing is rarely heard of (in any industry), perhaps due to its volitional existence.

The Voice of Experience

Founded in 1955, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), representing more than 12 million workers in the United States across more than 50 labor unions, recently published an open letter through Kotaku in support of unionizing game workers shortly after the major layoffs at Activision-Blizzard. This was the first major public statement they have ever made about the topic.

Talk of unionizing has come and gone like the ocean tides for at least a couple decades in the video games industry’s modern history: most recently after Red Dead Redemption 2 came out last October, Rockstar was under major fire; before that, in Q2 2011, there was “L.A. Noire” makers Team Bondi–Rockstar was the publisher. Now could be the time for change. Now can be an inflection point where the right circumstances and forces converge into a flash point to break a cycle of fruitless upset. (For more regarding the AFL-CIO’s position, see Polygon’s conversation with secretary-treasurer Liz Schuller, author of their letter.)

But no single thing is a panacea for all ills. You can read about 13 Advantages and Disadvantages of Labor Unions here–spoiler alert, the article lists one more disadvantage than advantages.

Past and present extensively covered, we will look to thoughts about the future (and other things) from outspoken gamer, writer, and ex-NFL player Chris Kluwe in my next article.

Those impacted by the layoffs at Blizzard, Arenanet, and others can find a depth of empathy, solace, and reasons to hope in the 14 years of perspective from Christine Brownell, who knows exactly what it’s like.

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Michael Shaneman

Raised on TV, video games, and then the Internet, Michael was born to be a lifelong gamer. Half-Chinese, Half-White, Michael loves global food and travel, knowing how to greet in over 25 languages. Meeting new people and great one-on-one conversations can be one of the greatest joys and are major reasons why interviews are a favorite activity of his. Not your stereotypical Anteater.