A move by Microsoft to cut costs last year at the Irish arm of gaming giant, Activision Blizzard, which produces the likes of Call of Duty, Candy Crush and World of Warcraft resulted in the loss of 128 jobs in Cork, according to company accounts.
Blizzard Entertainment Ltd operates a support centre in Cork for other companies in the gaming division and accounts for Blizzard Entertainment Ireland Ltd show that the job cuts cost €9 million in “employee severance expenses” last year.
In a note with the accounts the directors said that in January 2024 the ultimate parent of the company, Microsoft Corporation, announced it would reduce the size of its gaming workforce “to achieve sustainable cost structure”.
The accounts said that the impact on Blizzard Entertainment Ireland Limited was a decrease in employees of 128.
The directors said that “the headcount reduction has no impact on the nature of the company’s operations, or on the ability of the company to continue as a going concern”.
The accounts show that the company recorded a pretax profit of €3.54 million as revenues almost doubled from €16.9 million to €32.43 million.
The jump in revenues is skewed as the reporting period was for 18 months to the end of June last compared to a previous 12-month reporting period.
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The increase in pretax profits of €3.54 million follows pretax profits of €1.5 million in the previous 12 months.
The directors said that they were satisfied with the performance of the company and that the company continues to develop the portfolio of services provided to other group companies.
The company changed its reporting period in order to be in line with owner Microsoft, which in October 2023 took over the Call of Duty maker, Activision Blizzard, in a deal worth $75.4 billion, marking the largest ever sale in the gaming industry.
The deal closed in late 2023 after competition authorities in the UK approved it.
Only last month, a federal appeals court in the US rejected a legal challenge by the US federal trade commission to Microsoft’s purchase of Activision Blizzard.
Staff costs for the 18 months totalled €28.17 million which included the restructuring costs of €9.07 million. Salary costs totalled €16.5 million, and share-based payments amounted to €571,651.
The directors said that the company “continues to develop the portfolio of services provided to other group companies”.
They said that “as a management, administration and technical support centre, the directors are conscious of the importance of providing superior quality service to the company’s customers”.
Shareholder funds at the company totalled €20.1 million which included accumulated profits of €18.76 million.
