The new developments play out against the backdrop of additional allegations and a new lawsuit.
Following a company-wide walkout last week, Activision Blizzard employees formed the ABK Workers Alliance and issued a letter condemning the company’s choice of WilmerHale to lead investigations into discrimination and harassment. The news broke just hours after the Overwatch developer announced J. Allen Brack stepped down from his role as president, with Jen Oneal, former head of Vicarious Visions, and Mike Ybarra, previously Corporate Vice President of Xbox, appointed as co-leaders in his stead.
“Both leaders are deeply committed to all of our employees; to the work ahead to ensure Blizzard is the safest, most welcoming workplace possible for women, and people of any gender, ethnicity, sexual orientation, or background; to upholding and reinforcing our values; and to rebuilding your trust,” Blizzard said in a statement. “With their many years of industry experience and deep commitment to integrity and inclusivity, Jen and Mike will lead Blizzard with care, compassion, and a dedication to excellence.”
Bobby Kotick remains in his position as company CEO, and it’s to him, along with other executive leadership, that the ABK Workers Alliance addressed their statement. In the letter, which IGN obtained, the Workers Alliance expressed dissatisfaction over Activision Blizzard’s lack of response to demands for change outlined in the open letter more than 3,000 employees sent to company management last week.
It also criticized Kotick’s choice of WilberHale for leading the audit into Activision Blizzard’s diversity practices. The firm has a reputation for anti-union and anti-worker activities, the Alliance said, manifested in both its history with other clients and with Activision Blizzard. Earlier in 2021, WilmerHale fought against the company adopting a policy to expand the diversity of its hiring pool.
WilmerHale supported the Santa Monica-based studio’s claim that an existing rule mandating diverse interview pools for leadership was sufficient. Applying the same logic to all hiring practices would impose “serious and practical challenges… encroaching on the company’s ability to run its business and compete for talent in a highly competitive field.”
Additionally, the ABK Workers Alliance accused Activision Blizzard leadership of restricting “freedom of association since last week, including reducing the size of listening sessions and limiting access to those sessions.”
Axios reported an additional series of new claims against Activision Blizzard’s human resources department. Several current and former employees told the publication HR discouraged complaints and sometimes disparaged those who did come forward. Those who proceeded anyway did so knowing the department didn’t honor confidentiality.
“They were going to tell everybody about what you said. Nothing you said was private with HR,” an employee told Axios.
Bloomberg said an Activision Blizzard spokesperson told them the company’s senior people officer and head of HR, Jesse Meschuk, is no longer employed there as of this week, though no public announcement was made on the matter.
All this occurred in the lead-up to Activision Blizzard’s Q2 earnings call, but there was still more. An hour before the call, Kotaku reported Los Angeles-based Rosen Law Firm had filed a class action lawsuit against Activision Blizzard earlier in the day, alleging the company intentionally misled investors about potential threats to the business’ value.
The suit names the company, in addition to Bobby Kotick, CFO Spencer Neumann, and CFO Dennis Durkin and points to Activision Blizzard’s 2016 Sarbanes-Oxley Certification as the foundation of the complaint. In the certification, Kotick signed off on a statement claiming the company faced no obvious threats to its value and that any complaints of harassment were simply routine business matters.
“We are party to routine claims, suits, investigations, audits, and other proceedings arising from the ordinary course of business, including with respect to intellectual property rights, contractual claims, labor and employment matters, regulatory matters, tax matters, unclaimed property matters, compliance matters, and collection matters,” the statement reads.
“In the opinion of management, after consultation with legal counsel, such routine claims and lawsuits are not significant and we do not expect them to have a material adverse effect on our business, financial condition, results of operations, or liquidity.”
Activision Blizzard’s stock value has been on a downward trend since the middle of June, dropping from $99.18 per share on June 12 to $90.79 on June 23, before briefly rising in July and dropping again as news of California’s lawsuit started to spread. It closed today at $79.83 after the earnings call, though is predicted to rise in the near future.
Additionally, it seems sponsors are beginning to abandon Activision Blizzard. Esports site Dexerto first reported T-Mobile has withdrawn its support for Blizzard’s Overwatch and Call of Duty professional leagues.
As yet, Activision Blizzard has issued no response to this second lawsuit. However, during the earnings call, company leadership expressed confidence for the future.
“You have my unwavering commitment that we will continue to focus on serving our players and delivering the sustainable growth you've come to expect, and we will take all necessary actions to foster a culture that is supportive and welcoming for all of our employees,” Kotick said during the call. “We expect to be the very best example for other companies to emulate.”
In addition to hiring WilmerHale again, those actions involve new training for managers so they deal with future complaints appropriately.
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