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Layoff Roundup - 30 October 2023 Update: Bungie lays off 8% of its workforce (~100 people) following missed annual revenue target by 45%

Brian

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Commissar SFLUFAN

Commissar SFLUFAN

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According to Jason Schreier, the layoffs amount to 8% (~100 people) of Bungie's workforce.  Two weeks ago, the staff were informed that Bungie was going to miss its annual revenue targets by 45% :shock:

 

What the hell exactly were management's revenue projections to begin with?!?  A 45% miss on revenue is nothing short of shocking as in "kill the product" type of shocking.  Unfortunately, it wouldn't surprise me in the least if this isn't only the first round of layoffs.

 

Also, Sony should probably "request" the resignation of Bungie's executive leadership.

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Spawn_of_Apathy

Spawn_of_Apathy

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27 minutes ago, Commissar SFLUFAN said:

According to Jason Schreier, the layoffs amount to 8% (~100 people) of Bungie's workforce.  Two weeks ago, the staff were informed that Bungie was going to miss its annual revenue targets by 45%


Hmm based on time frame that would be an awful season of the plunder and alright season after that and then the very disappointing Lightfall expansion. Yikes. 
 

I told my friend yesterday, this feels like the first time I actually believe “Destiny is dying”. I had no idea it was that bad. 

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TwinIon

TwinIon

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As someone who played a whole lot of Destiny 2 the last couple years, it doesn't surprise me at all that Bungie leadership has dug them into a giant hole. I still think the core of the game is good, and they've done some good stuff with it at times, but I think they've long suffered from a failure of leadership and direction.

 

In order to keep content flowing at a good pace, they commoditized their seasons, making all content follow a very predictable samey pattern that could be pushed out over and over again. While I think the amount of new stuff they put out is praiseworthy, they've got so much focus on pushing out that stuff that they hardly ever get around to fixing or improving the more important things.

 

I think the staff has done a very commendable job at churning out stuff, but IMO those efforts were too often pointed in the wrong direction. I think that was exacerbated by the existence of Marathon, which seemed to have siphoned off basically the entire team dedicated to the PvP and PvPvE sides of the game.  

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Commissar SFLUFAN

Commissar SFLUFAN

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The revenue projection miss gets even "better" with the realization that the "inflated" revenue numbers were more than likely used by Bungie management in their valuation of the company for the purposes of determining the acquisition price from Sony.

 

I have zero doubt that Sony's management is thoroughly livid with Bungie's management right about now.

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Brian

Brian

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10 minutes ago, Commissar SFLUFAN said:

The revenue projection miss gets even "better" with the realization that the "inflated" revenue numbers were more than likely used by Bungie management in their valuation of the company for the purposes of determining the acquisition price from Sony.

 

I have zero doubt that Sony's management is thoroughly livid with Bungie's management right about now.

As a person who has been involved in a sale of a company, this undoubtedly is the  case. You inflate the projected revenue targets to jack the price and deal with the fallout later. Executives get big enough closing/retention bonuses that it’s worth the risk. 

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Spawn_of_Apathy

Spawn_of_Apathy

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44 minutes ago, Brian said:

As a person who has been involved in a sale of a company, this undoubtedly is the  case. You inflate the projected revenue targets to jack the price and deal with the fallout later. Executives get big enough closing/retention bonuses that it’s worth the risk. 


there were people at the time wondering how Bungie was worth $3.6B. I guess the answer was they really weren’t. 

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Brick

Brick

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As an active player of Destiny 2, since despite its faults it's a very fun game, especially with friends, this is all disheartening and worrying to hear. Sounds like a bunch of corporate bullshit fucking people, and the game over, but of course execs never take a pay cut, it's always the workers who get punished for management's mistakes. I hope the game can survive and pull through this, and more importantly that those laid off can find work quickly. 

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Commissar SFLUFAN

Commissar SFLUFAN

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1 hour ago, Brian said:

As a person who has been involved in a sale of a company, this undoubtedly is the  case. You inflate the projected revenue targets to jack the price and deal with the fallout later. Executives get big enough closing/retention bonuses that it’s worth the risk. 

 

40 minutes ago, Spawn_of_Apathy said:


there were people at the time wondering how Bungie was worth $3.6B. I guess the answer was they really weren’t. 

 

As @Brian stated, a certain degree of "goosing" the revenue projections to increase the valuation of a privately-held business involved in an acquistion transaction is to be expected by all parties.

 

But what Bungie's management appears to have done in their revenue projections goes far beyond that and practically enters the realm of "fraud".

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Brian

Brian

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Without knowing the targets, it’s hard to say how much is inflated for the sale price and how much is related to the expansion and Marathon being pushed. I wouldn’t be surprised that during the sale, Bungie was bullish on these release dates.
 

I do wonder if Ryan’s retirement isn’t a play by Sony to regain control of the a division. Putting the CFO/COO in charge now feels a bit different than when it was announced. 

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  • Commissar SFLUFAN changed the title to Layoff Roundup - 30 October 2023 Update: Bungie lays off 8% of its workforce (~100 people) following missed annual revenue target by 45%
JPDunks4

JPDunks4

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19 hours ago, Spawn_of_Apathy said:


there were people at the time wondering how Bungie was worth $3.6B. I guess the answer was they really weren’t. 

 

There were rumors at the time Bungie was in talks with Microsoft first, but MS walked away as they felt the price was too high.

 

Jim Ryan did say he felt he'd get more value out of Bungie at 3.5 billion than MS will out of the 70 billion Activision deal.

 

Still could be the case if Marathon is a hom run, and who knows if MS actually capitalizes on all the Activision IP they got.

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Spawn_of_Apathy

Spawn_of_Apathy

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2 minutes ago, JPDunks4 said:

 

There were rumors at the time Bungie was in talks with Microsoft first, but MS walked away as they felt the price was too high.

 

Jim Ryan did say he felt he'd get more value out of Bungie at 3.5 billion than MS will out of the 70 billion Activision deal.

 

Still could be the case if Marathon is a home run and they right the ship on Destiny.


maybe. But I don’t think any of that is possible with the current leadership that dug them into this hole. Especially with less staff to make content and put out updates and fixes. 

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Commissar SFLUFAN

Commissar SFLUFAN

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3 minutes ago, JPDunks4 said:

There were rumors at the time Bungie was in talks with Microsoft first, but MS walked away as they felt the price was too high.

 

Documents from the FTC case indicated that Microsoft's main risk factor with a Bungie acquisition was their high cash burn rate:

 

Quote

Bungie, a now Sony-owned studio, was on the list, with Microsoft's internal document stating that the "acquisition of Bungie will include securing valuable IP, Destiny (and its community) and integration of its dev & live ops infrastructure into Xbox Game Studios." Microsoft had identified a "high burn-rate" risk for Bungie, alongside NetEase's $100 million minority stake investment in 2018.

 

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Spawn_of_Apathy

Spawn_of_Apathy

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24 minutes ago, Brian said:

For Microsoft to pause, that burn rate must be significant. It’s seems pretty clear that Sony saw Bungie as a necessary purchase to lead its GaaS conversion and overlooked any red flags. 


Im not surprised. I’ve often felt and even said somewhere recently that Destiny 2 has to be one of the most expensive games to support and update. It never appeared like the margins were so thin as multiple times in the franchise’s history the player population fell off a cliff, but Bungie was able to bounce back, and do so without massive layoffs. And maybe they could have done so if Bungie didn’t now have to answer to Sony executives and shareholders. 
 

though maybe I’m wrong and Bungie selling themselves saved the company from imploding. And had they not this year would have bankrupted the company. 
 

but if that’s true that still feels like a problem with leadership. You don’t neglect your golden egg laying chicken to trying and raise another breadwinner that’s still 1-3 years away and lose it all. And it has been obvious for a while that Bungie has been pouring funds and reallocated significant top talent on to what we now know is Marathon. 

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Commissar SFLUFAN

Commissar SFLUFAN

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1 hour ago, Spawn_of_Apathy said:

Bungie selling themselves saved the company from imploding. And had they not this year would have bankrupted the company. 

 

Personally, I'm of the the opinion that Bungie simply has no financial capacity to exist as an independent entity in its current structural condition.

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Brick

Brick

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Remember the two times Iwata, and some of the other execs at Nintendo took a 50% pay cut when the 3DS and Wii U didn't do so well because they knew lay offs would be terrible for employee morale? Yeah I think about that a lot. Good luck getting an American company to do that. 

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Commissar SFLUFAN

Commissar SFLUFAN

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16 hours ago, Brick said:

Remember the two times Iwata, and some of the other execs at Nintendo took a 50% pay cut when the 3DS and Wii U didn't do so well because they knew lay offs would be terrible for employee morale? Yeah I think about that a lot. Good luck getting an American company to do that. 

 

 

0x0.jpg?format=jpg&height=600&width=1200

New Revelations About ‘Destiny 2’ Declines, Bungie Layoffs And Final Shape As Make Or Break

WWW.FORBES.COM
There's new information about the recent Bungie layoffs and the health of Destiny 2 headed into The Final Shape next year.

 

Quote

Management said other levers were looked at to avoid layoffs. When employees asked if one lever was executive compensation, they were told no, and that it would not happen at the company. (Update: Post-publication, Bungie responded saying that CEO Pete Parsons and some other executives previously forfeited annual bonuses before the layoffs. But staff was not informed this happened until yesterday. The sum total of the bonuses given up is not clear).

 

This part below is fairly obvious in retrospect, but is definitely worth emphasizing: Bungie would more than likely not even exist without the Sony acquisition:

 

Quote

Internally, really no one is blaming Sony for this, even management. Some employees were told that if the Sony buyout did not happen, that with current Destiny 2 performance the studio itself would have been in jeopardy if they were still independent.

 

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Brian

Brian

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I remember when I worked for a company that filed for chapter 11 bankruptcy. The CFO had a meeting for the finance departments to discuss. Company announced promotion/merit freezes, ending the 6% 401k match, and layoffs. Dude kept talking about tightening the purse strings and coming out stronger than ever. I was able to ask a question if the executives will be taking a reduction in salary and suspending their bonuses, “we are working day and night to get us out of this situation and deserve our compensation.”  He went on how other companies don’t do it and there is no benefit if they did except “people will feel good”. Bingo bud. You put us in this shit situation, you should take the brunt of it. They want all the credit and money when it is good and none of the blame when it goes bad. 

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Brick

Brick

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2 hours ago, Commissar SFLUFAN said:

Management said other levers were looked at to avoid layoffs. When employees asked if one lever was executive compensation, they were told no, and that it would not happen at the company. (Update: Post-publication, Bungie responded saying that CEO Pete Parsons and some other executives previously forfeited annual bonuses before the layoffs. But staff was not informed this happened until yesterday. The sum total of the bonuses given up is not clear).

 

Yeah not getting an annual bonus is not the same as getting a cut in salary. Corporate North America is just so greedy. 

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Nokra

Nokra

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9 hours ago, Brian said:

I remember when I worked for a company that filed for chapter 11 bankruptcy. The CFO had a meeting for the finance departments to discuss. Company announced promotion/merit freezes, ending the 6% 401k match, and layoffs. Dude kept talking about tightening the purse strings and coming out stronger than ever. I was able to ask a question if the executives will be taking a reduction in salary and suspending their bonuses, “we are working day and night to get us out of this situation and deserve our compensation.”  He went on how other companies don’t do it and there is no benefit if they did except “people will feel good”. Bingo bud. You put us in this shit situation, you should take the brunt of it. They want all the credit and money when it is good and none of the blame when it goes bad. 

 

8 hours ago, Brick said:

 

Yeah not getting an annual bonus is not the same as getting a cut in salary. Corporate North America is just so greedy. 

 

Agreed, and I'd point out the obvious too that it's also a matter of scale.  A CEO  making, say conservatively $1 million/year, is going to have their life negatively affected a lot less by a loss of even $100,000 than a person making $50k/year is going to notice losing $5k, even though they're both 10% cuts. The baseline matters, of course, and the CEO's remaining $900,000 still put him in the "very wealthy" category in my book, whereas the employee making $45k is probably going to suddenly have to reevaluate a few things in their life. 

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Keyser_Soze

Keyser_Soze

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2 hours ago, Nokra said:

Agreed, and I'd point out the obvious too that it's also a matter of scale.  A CEO  making, say conservatively $1 million/year, is going to have their life negatively affected a lot less by a loss of even $100,000 than a person making $50k/year is going to notice losing $5k, even though they're both 10% cuts. The baseline matters, of course, and the CEO's remaining $900,000 still put him in the "very wealthy" category in my book, whereas the employee making $45k is probably going to suddenly have to reevaluate a few things in their life. 

 

Reminds me of this X from yesterday

 

spacer.png

 

This poor football player only makes $400,000 a game after taxes. Let me pull out a microscopic violin.

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Remarkableriots

Remarkableriots

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b5En8gyhrSCe87iiEAhfV-1200-80.jpg
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In other words, it's the same old story: These people were talented and valued and made important contributions to the company, but their continued employment threatens the bottom line and so out the door they go. The videogame industry has never been a particularly stable place to work but 2023 has been an absolute bloodbath. Companies ranging from tech giants like Microsoft, Google, and Amazon to major game publishers and even small independent studios have all either let people go or closed their doors outright in their pursuit of increased profits and shareholder value.

 

 

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Remarkableriots

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Polygon_video_game_industry_layoffs_cris

Video game company layoffs are creating an industry crisis

WWW.POLYGON.COM
Video game companies have laid off thousands of workers this year
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Though there isn’t clear data on how 2023’s disastrous layoffs compare to other years, game developers Polygon spoke to agree: This has been one of the worst years for workers in a long, long time. (Polygon interviewed more than a dozen game developers for this story.) Unofficial trackers suggest more than 7,000 video game workers have been laid off in 2023; for comparison, another community-driven list suggested there were roughly 1,000 in 2022. The nearby tech industry has seen a 716% increase in layoffs announced year over year, too, according to research firm Challenger Gray & Christmas.

 

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crispy4000

crispy4000

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On 11/15/2023 at 9:12 PM, Remarkableriots said:
b5En8gyhrSCe87iiEAhfV-1200-80.jpg

 


I wonder if the hits there were related to closing their native pc app for Humble Choice.

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Brian

Brian

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0x0.jpg?format=jpg&height=600&width=1200

‘Destiny 2’ Is Now Selling The Worst Microtransaction It’s Ever Sold

WWW.FORBES.COM
Normally on the second day of a new season of Destiny 2, I would be writing about how day one went, though today, that’s not the case with Season of the Wish. Rather, my attention is...

fan reaction not too hot as the tags associated to this dlc are the following:

 

IMG-1365.png

lololololol trying to close that 45% gap won’t be easy 

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