Activision Blizzard Inc updates
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A top executive at Activision Blizzard has left the company in a management shake-up promising to bolster “integrity and inclusivity”, after America’s most valuable video-games company was rocked by allegations of workplace misconduct.
Hundreds of Activision Blizzard workers walked out in protest last week at the company’s handling of a California state lawsuit alleging sex discrimination, harassment and retaliation. The case alleged a “pervasive ‘frat boy’ workplace culture” at the Santa Monica-based company.
Activision Blizzard is just the latest gaming company to face complaints about its treatment of female employees, including Assassin’s Creed developer Ubisoft, which admitted to “toxic behaviours” last year.
J Allen Brack, president of Blizzard Entertainment, which makes the Overwatch and World of Warcraft games, is leaving to “pursue new opportunities”, the company said ahead of its latest quarterly earnings report on Tuesday.
Blizzard’s new co-leaders, Jen Oneal and Mike Ybarra, bring “deep commitment to integrity and inclusivity” and an “unwavering sense of accountability”, said Daniel Alegre, Activision Blizzard’s chief operating officer, who joined from Google last year.
According to a lawsuit filed by California’s employment agency, women working at Activision Blizzard receive lower pay than male employees and struggle to reach the upper ranks of the company, while many were “subjected to constant sexual harassment”.
Brack, a 15-year veteran at Blizzard, was among the executives who “failed to take effective remedial measures in response” to complaints from female employees over several years, the state’s suit alleged.
In a letter to staff on July 22, Brack said the behaviour described in the allegations was “extremely troubling” and “completely unacceptable”.
A company spokesperson said on Tuesday: “It became clear to J Allen Brack and Activision Blizzard leadership that Blizzard Entertainment needs a new direction and leadership given the critical work ahead in terms of workplace culture, game development and innovation.”
Brack could not immediately be reached by the Financial Times for comment on the lawsuit’s allegations.
Shares in the company have fallen about 14 per cent since the case was filed two weeks ago. But they jumped 6 per cent later on Tuesday as executives brushed aside Wall Street worries that the scandal would hurt business, and the company raised its financial guidance for the current quarter.
Armin Zerza, chief financial officer, said that despite fears about the impact on sales, “currently our business performance is strong”. He added that the company was being “cautious” about its forecast for the next quarter and that compliance and other costs were set to rise, but Activision still forecast that revenue would hit $1.97bn this quarter, almost 10 per cent above most analysts’ expectations.
Activision Blizzard’s initial reaction to the lawsuit dismissed it as “irresponsible behaviour from unaccountable state bureaucrats” who had “rushed to file an inaccurate complaint”. The company’s chief compliance officer said in an internal memo that the case “presented a distorted and untrue picture of our company, including factually incorrect, old and out of context stories”.
But a few days later, after protests from employees, Bobby Kotick, chief executive of Activision Blizzard, admitted that the company’s initial responses were “quite frankly, tone deaf”. He pledged to “do a better job of listening now, and in the future”, including by appointing a law firm to review its workplace policies.
Kotick, whose $155m pay package for 2020 prompted protests from some investors in June, has promised a series of changes, including to the content of its games and hiring practices, as well as to personnel.
“Anyone found to have impeded the integrity of our processes for evaluating claims and imposing appropriate consequences will be terminated,” Kotick said in his letter to staff a week ago.
Alegre’s own message to employees on Tuesday announcing the reshuffle at Blizzard did not directly reference the lawsuit.
In a statement posted online by Blizzard, Brack said: “I am confident that Jen Oneal and Mike Ybarra will provide the leadership Blizzard needs to realise its full potential and will accelerate the pace of change. I anticipate they will do so with passion and enthusiasm and that they can be trusted to lead with the highest levels of integrity and commitment to the components of our culture that make Blizzard so special.”
Additional reporting by Richard Waters in San Francisco