A Ubisoft Minority Investor Demands Restructuring and Layoffs
Following a string of underperforming game releases, Ubisoft faces pressure from a minority investor, Aj Investment, to overhaul its management and reduce its workforce. Aj Investment, in an open letter, expressed "deep dissatisfaction" with Ubisoft's performance and strategic direction.
The investor cited several concerns, including the delayed release of key titles like Rainbow Six Siege and The Division until late March 2025, a lowered revenue outlook for Q2 2024, and overall poor performance. Aj Investment directly called for a new CEO to replace Yves Guillemot, emphasizing the need for cost optimization and a more agile company structure.
This pressure contributed to a significant decline in Ubisoft's share price, falling over 50% in the past year, according to the Wall Street Journal. Ubisoft has yet to publicly respond to the letter.
Aj Investment's Juraj Krupa further criticized Ubisoft's management for prioritizing short-term gains over long-term strategic planning and gamer experience. He specifically pointed to the cancellation of The Division Heartland and the underwhelming reception of Skull and Bones and Prince of Persia: The Lost Crown. Krupa also highlighted the underperformance of Star Wars Outlaws, despite high expectations, and the stagnation of popular franchises like Rayman, Splinter Cell, For Honor, and Watch Dogs.
Beyond management changes, Aj Investment advocated for significant staff reductions, citing the disparity in employee numbers compared to competitors like EA, Take-Two Interactive, and Activision Blizzard, who achieve higher revenues and profitability with smaller teams. Krupa suggested selling underperforming studios to streamline operations and improve efficiency. While acknowledging previous layoffs (approximately 10% of the workforce), he stressed that further cost-cutting measures are necessary to remain competitive. Ubisoft's current cost-cutting plan, aiming for €150 million in savings by 2024 and €200 million by 2025, was deemed insufficient.
