godofallu: 2 executive wages in almost every business are competitive to the industry rates. Pay them less and they leave and your company goes under. Not many companies overpay their executives, since that would be stupid for the stockholders/owners.
Almost every company overpays its executives. Executive wages might be competitive to the industry rates, but the industry rates are too high. They have ALWAYS been too high.
You can say that you have to consider the "marginal value each worker adds" or whatever but Blizzard's one of the companies at the top of the games industry, they're not exactly going broke. And those cuts couldn't have possibly made from any other place?
I mean, these are people with lives and maybe families to support, and some executive is giving them the axe because of some numbers on a piece of paper.
My apologizes to the Blizzard staff, as they are all talented people and, while I may not be a fan of their games, I understand and appreciate all of the work that went into them.
Cheers for their future endeavors, and to the future success of Blizzard.
good job blizz... welcome to your new status as "part of the problem"!
man... I wish they would penalize all these companies who lay off their staff whenever profits drop down too low that the bosses don't get their bonuses... a bad day for everyone.
Andy Chalk: The good news is that 90 percent of the layoffs will come from non-development departments, and the World of Warcraft team will not be touched.
RT-Medic-with-shotgun: Over two million subscribers gone? ditch a much as we can to keep the airship afloat. NOT THE GOLD! NOT THE GOLD! throw some crew members over the edge instead.
HAHAHAHAH 10/10. Would read again. Etc.
The facebook responses however are a litany of stupidity and fail on this article.
The reasons Blizzard are stagnating and slowly toppling backwards are never to do with a loss of their core company values, respect for their customers and franchises combined with a general lowering in quality of output. Of course not. It's all just bad luck and economics.
Unfortunately companies don't exist to employ people, it's a shame absolutely. But it's not 'wrong' unless quality of service goes down as a result. What happened here is someone said "So what do all these people do?" and the answer wasn't good enough.
SL33TBL1ND: So if it isn't their development guys, are they laying off their cinematics team? Because that would be awful, those guys are some of the best I've ever seen.
No, most of their staff are community managers, GMs, maintenance guys and the like. I'd be willing to bet a couple of thousand dollars their development team does not make up 10% of the whole company's staff.
Lumber Barber: They can never give a good excuse, can they? It's always the "Stuff changes, things happen, we fire people" card.
What better excuse is their? They're are a business, the only issue at all relevant is whether the benefits of keeping those people employed outweighs the costs. If not, that's it.
The problem is that even when these cuts seem to be perfectly justified, as I and some other people pointed out, Blizzard insists of using this politician-y sort of PR speak that doesn't actually say anything.
RT-Medic-with-shotgun: Over two million subscribers gone? ditch a much as we can to keep the airship afloat. NOT THE GOLD! NOT THE GOLD! throw some crew members over the edge instead.
HAHAHAHAH 10/10. Would read again. Etc.
The facebook responses however are a litany of stupidity and fail on this article.
The reasons Blizzard are stagnating and slowly toppling backwards is never to do with a loss of their core company values, respect for their customers and franchises combined with a general lowering in quality of output. Of course not. It's all just bad luck and economics.
Which is really, really disheartening. It's a shame the average consumer does not give a flying fuck about anything related to business ethics.
I was just defending Blizzard on this, but man, fuck them.
I'm glad to see that people are looking at this rationally and not making up random explanations for what could easily be a minor restructuring of a massive company. Besides, it does nothing for the workers if they keep them on as charity, if they're not really doing anything with their careers, it wouldn't be right to keep them in a comfortable but essentially useless dead end position.
SL33TBL1ND: So if it isn't their development guys, are they laying off their cinematics team? Because that would be awful, those guys are some of the best I've ever seen.
No, most of their staff are community managers, GMs, maintenance guys and the like. I'd be willing to bet a couple of thousand dollars their development team does not make up 10% of the whole company's staff.
I don't know... They spend millions on their cinematics. I could actually believe that they have 600 people on that team.
review of its business based on current organizational needs
Notice how whenever a corporation "review's its needs" the outcome is never lower executive compensation or increase employee benefits.
Sometimes it is. its just that such news aren't usually scandalous enough to reach the majority. ive seen my fair share of "cut the government pay" changes and there was pretty much no news about it. but whenever someone decides to do the same, say, to teachers the outrage is astonishing. its jsut that when it happens people automatically assume "thats how its supposed to be" and dont report it so much. truth is, some employees have to go. sure maybe 600 at once is much, but ive seen when companies overstretch themselves with too many projects at once and start getting dangerous, and when it has to retract to their core projects, people get fired. for example when CCP fired 20% of thier staff and focused back to the game that made thier name
SL33TBL1ND: So if it isn't their development guys, are they laying off their cinematics team? Because that would be awful, those guys are some of the best I've ever seen.
No, most of their staff are community managers, GMs, maintenance guys and the like. I'd be willing to bet a couple of thousand dollars their development team does not make up 10% of the whole company's staff.
I don't know... They spend millions on their cinematics. I could actually believe that they have 600 people on that team.
Paying 20-40 people a decent salary over a year is "millions". The term doesn't really describe a big pile of money when it comes to bigger studios.
That said, I did a little bit of googling, and the cinematic side actually surprised me a bit. In august 2009, they had 123 people in the cinematic team. And 2000 people working as game masters, 1700 working for "international offices", 200 in quality assurance, 240 in billing, and so on.
Game design? 37 people.
37 people spread throughout 4 games at the time. Man, what a fucking embarrassment and man, how right was I in all those Diablo 3 threads. When I said they probably have like 20 people working on the game, I was likely overestimating.
Hammeroj: No, most of their staff are community managers, GMs, maintenance guys and the like. I'd be willing to bet a couple of thousand dollars their development team does not make up 10% of the whole company's staff.
I don't know... They spend millions on their cinematics. I could actually believe that they have 600 people on that team.
Paying 20-40 people a decent salary over a year is "millions". The term doesn't really describe a big pile of money when it comes to bigger studios.
That said, I did a little bit of googling, and the cinematic side actually surprised me a bit. In august 2009, they had 123 people in the cinematic team. And 2000 people working as game masters, 1700 working for "international offices", 200 in quality assurance, 240 in billing, and so on.
Game design? 37 people.
37 people spread throughout 4 games at the time. Man, what a fucking embarrassment and man, how right was I in all those Diablo 3 threads. When I said they probably have like 20 people working on the game, I was likely overestimating.
So that's why their trailers always looks so fucking beautiful.
godofallu: 2 executive wages in almost every business are competitive to the industry rates. Pay them less and they leave and your company goes under. Not many companies overpay their executives, since that would be stupid for the stockholders/owners.
Almost every company overpays its executives. Executive wages might be competitive to the industry rates, but the industry rates are too high. They have ALWAYS been too high.
You can say that you have to consider the "marginal value each worker adds" or whatever but Blizzard's one of the companies at the top of the games industry, they're not exactly going broke. And those cuts couldn't have possibly made from any other place?
I mean, these are people with lives and maybe families to support, and some executive is giving them the axe because of some numbers on a piece of paper.
I don't know if that adds context to the issue, but honestly... how can you even look at that number without feeling angry?
Welcome to Western society. It's like that in every big organisation; they're just too big, people stop being people and start being meaningless numbers. Combine that with a "profit over people" mentality and voila, you get situations like this.
Bastards? What're you talking about? Blizzard are the good guys! They're the paragon of the industry. The company that stands up for the little guys. Stands up for the community.
I haven't heard that about blizzard in like 5 years, that's valve to the community now.
well.. "...Hell...it's about time~" They can't depend on a 14 years old game (Yes, I am talking about WoW) to cash in, THEY NEED TO MAKE NEW GAMES, This is the wake up call for Blizzard, time to get to work, there is no free money. Maybe it's time for Warcraft4 eh? Perhaps we need the same thing happening to Valve, so we can finally get Episode 3?
They probably had 600 people they just didn't need anymore. Sometimes restructuring is just that: restructuring. Even if you're a multi-million dollar company, you don't have 600 people who you pay to twiddle their thumbs or do things that are only mildly useful for your long-term plans.
And if the move to fire 600 people was a measure to stop them from being a drain on the CEO golden toilet seat fund (as everyone and their grandmother is implying), then why are they hiring for other positions? Blizzard isn't going to fire people to save money if they're just going to hire other people who will use that same money.
In the near future, we'll be seeing headlines such as "Activision fires 1. Afflicted workers claim that management chose poorly, and that the CEO was "real mean"."
godofallu: 2 executive wages in almost every business are competitive to the industry rates. Pay them less and they leave and your company goes under. Not many companies overpay their executives, since that would be stupid for the stockholders/owners.
Almost every company overpays its executives. Executive wages might be competitive to the industry rates, but the industry rates are too high. They have ALWAYS been too high.
You can say that you have to consider the "marginal value each worker adds" or whatever but Blizzard's one of the companies at the top of the games industry, they're not exactly going broke. And those cuts couldn't have possibly made from any other place?
I mean, these are people with lives and maybe families to support, and some executive is giving them the axe because of some numbers on a piece of paper.
I don't know if that adds context to the issue, but honestly... how can you even look at that number without feeling angry?
Welcome to Western society. It's like that in every big organisation; they're just too big, people stop being people and start being meaningless numbers. Combine that with a "profit over people" mentality and voila, you get situations like this.
Unfortunately, they overpay higher management because good higher management can create such super-giants as Blizzard or such paragons of the industry as Valve, while bad management can cause everything to just fall the fuck apart. The part where capitalism comes into play is the fact that these CEO's know it, and could just leave for a different company if they aren't satisfied with their current paycheck. To them it's not stealing rightful wages from poorer workers, it's accepting money for a job that essentially only they can do. If the company they're managing is paying them $500,000, and somebody comes along and says, "Hey, you're doing a fantastic job..! I'll pay you $14,000,000 to do that for us!", then can you really blame them for taking that job? If hiring that man on as a CEO makes the company make a fuck-ton more money at lower cost, can you blame them for paying him for the job?
This is why, were I the owner of a company, I would never go public.
When you're public, you can no longer work for the benefit of employees. You can only fatten your CEO's wallet and the wallets of shareholders. Fuck that. I don't need to make hundreds of billions. I'd rather that money go towards helping people and giving my employees better wages.
After talking with a friend that works in Blizz's IGS. The people that were cut from the GM crew were people that "Should have gotten cut months ago, but management didn't want to let anyone go"
600 people, though. That's a lot of redundancy. Guess they're feeling the sub hit harder than they let on.
Bastards? What're you talking about? Blizzard are the good guys! They're the paragon of the industry. The company that stands up for the little guys. Stands up for the community.
I haven't heard that about blizzard in like 5 years, that's valve to the community now.
I hadn't heard it for years either, but damned if I wasn't flooded with messages and posts from people implying just that in regards to their suit against Valve over Dota.
faefrost: This is where it can be taken a lot of different ways. And I never ever understand why companies use so much doublespeak and pointless blathering rather than just simply say what is going on? What they are affraid of spooking the investors?
Buisiness numpties are taught to do this, and it's hilarious.
I hope that cut is coming from their PR department because it's not been good stuff recently.
Deshara: The part where capitalism comes into play is the fact that these CEO's know it, and could just leave for a different company if they aren't satisfied with their current paycheck. To them it's not stealing rightful wages from poorer workers, it's accepting money for a job that essentially only they can do. If the company they're managing is paying them $500,000, and somebody comes along and says, "Hey, you're doing a fantastic job..! I'll pay you $14,000,000 to do that for us!", then can you really blame them for taking that job? If hiring that man on as a CEO makes the company make a fuck-ton more money at lower cost, can you blame them for paying him for the job?
I don't blame the CEO for taking a job where he can make more money, but the thing is that the whole system should never have been set up in a way so as to allow a man to make $16 million. CEOs are doing a job only they can do? I won't believe that for half a second. The job they may do is not particularly easy but they aren't harder or more diligent workers than the average engineer or doctor or artist.
A lot of people think professional athletes are overpaid, but they make significantly less than CEOs do, and have significantly riskier jobs. Every time a football player goes out on the field, he's risking the possibility of an injury that could end his career.
What risk is there for a CEO? There might be pressure to perform well due to the fact that bad leadership can wreck a company, but even when that happens, the shitty CEO in question is typically let go with a comfortable multi-million dollar severance package that ensures they'll be able to live in perfect luxury until they're able to coast into their next corporate executive job. There's NO accountability. They're never punsihed or made to suffer for their major league fuckup. You know who does suffer? All the workers who have to get laid off to offset the money lost by that CEO's shitty business decisions. And those workers don't get multi-million dollar severance packages.
Deshara: The part where capitalism comes into play is the fact that these CEO's know it, and could just leave for a different company if they aren't satisfied with their current paycheck. To them it's not stealing rightful wages from poorer workers, it's accepting money for a job that essentially only they can do. If the company they're managing is paying them $500,000, and somebody comes along and says, "Hey, you're doing a fantastic job..! I'll pay you $14,000,000 to do that for us!", then can you really blame them for taking that job? If hiring that man on as a CEO makes the company make a fuck-ton more money at lower cost, can you blame them for paying him for the job?
I don't blame the CEO for taking a job where he can make more money, but the thing is that the whole system should never have been set up in a way so as to allow a man to make $16 million. CEOs are doing a job only they can do? I won't believe that for half a second. The job they may do is not particularly easy but they aren't harder or more diligent workers than the average engineer or doctor or artist.
A lot of people think professional athletes are overpaid, but they make significantly less than CEOs do, and have significantly riskier jobs. Every time a football player goes out on the field, he's risking the possibility of an injury that could end his career.
What risk is there for a CEO? There might be pressure to perform well due to the fact that bad leadership can wreck a company, but even when that happens, the shitty CEO in question is typically let go with a comfortable multi-million dollar severance package that ensures they'll be able to live in perfect luxury until they're able to coast into their next corporate executive job. There's NO accountability. They're never punsihed or made to suffer for their major league fuckup. You know who does suffer? All the workers who have to get laid off to offset the money lost by that CEO's shitty business decisions. And those workers don't get multi-million dollar severance packages.
You're right, the system sucks. Be mad at life for being like that, not people for making more money than others.
godofallu: 2 executive wages in almost every business are competitive to the industry rates. Pay them less and they leave and your company goes under. Not many companies overpay their executives, since that would be stupid for the stockholders/owners.
Almost every company overpays its executives. Executive wages might be competitive to the industry rates, but the industry rates are too high. They have ALWAYS been too high.
You can say that you have to consider the "marginal value each worker adds" or whatever but Blizzard's one of the companies at the top of the games industry, they're not exactly going broke. And those cuts couldn't have possibly made from any other place?
I mean, these are people with lives and maybe families to support, and some executive is giving them the axe because of some numbers on a piece of paper.
I don't know if that adds context to the issue, but honestly... how can you even look at that number without feeling angry?
Why would I be angry at him for going to college, working his way up, and helping to manage a company that employs over 5000 people? He makes 16m, well guess what most athletes laugh at that amount and what do they do for anybody?
I guess if he were to work for free that would offset 180 people or so. Still wouldn't make any sense to employ people that make you less than you pay them but hey why not throw money down the drain? It's not like the stockholders would fire him for wasting a few mill, or like his compensation is tied to performance. That isn't standard operating procedure.
Why don't you hire some people and have them stand around and do nothing? Oh because you probably use the same equation he does to determine whether you want to hire people. It isn't a moral issue, it is a financial one.
Lal i thought they were all in all around 600 people developers and other staff. . . Well maybe they over-reached and with the WoW declining population it seems to me like a natural move. However that might change with Mists Of Pondaria and who knows if the expansion is truly great we might peak again around 11/12 million. And if they really manage to deliver expansions in shorter periods of time oh boy. . .
It's becoming increasingly aware (at least from what I'm seeing) is that the video game market is changing (obviously) but massive development companies and publishers are not changing. I believe that if executives lowered their salary from ridiculous high to slightly less ridiculous high, then maybe they will still have talented people working for them creating fantastic pieces of entertainment.
I wish all those affected good luck in the future.
One thing to keep in perspective is that atleast the layed off are getting severance packages, so they should be fine until they find new work.
The bad thing is obviously the impact this will have on their games. They say "mostly" the dev teams haven't been touched. That directly (in my mind) translates to: someone -was- fired from certain dev teams. Which is VERY BAD.
Can you imagine one day waking up and hearing that say, Todd Howard has been layed off from Bethesda? Would the Elder Scrolls be the same without him? No they wouldn't...
Almost every company overpays its executives. Executive wages might be competitive to the industry rates, but the industry rates are too high. They have ALWAYS been too high.
You can say that you have to consider the "marginal value each worker adds" or whatever but Blizzard's one of the companies at the top of the games industry, they're not exactly going broke. And those cuts couldn't have possibly made from any other place?
I mean, these are people with lives and maybe families to support, and some executive is giving them the axe because of some numbers on a piece of paper.
I did a quick search on Mike Morhaime and found that his total. compensation for 2010 was $16,544,154.00. Figure is broken down here:
http://people.forbes.com/profile/michael-morhaime/119128
I don't know if that adds context to the issue, but honestly... how can you even look at that number without feeling angry?