A Novato gaming company is set to lay off 86 employees at the end of March, according to the state.
The employees work for Activision Blizzard developer Toys for Bob, which was incorporated in 2002. The developer is known for titles such as “Crash Bandicoot,” “Spyro” and “Skylanders.”
Activision, whose titles include “Call of Duty,” acquired the Toys for Bob studio for an undisclosed price in 2005.
Activision did not respond to a request for comment. An employee that answered the intercom at the studio’s space at Hamilton Landing declined to comment on the company’s plans.
The layoffs come on the heels of Microsoft’s purchase of Activision in October for $68.7 billion. The acquisition was the biggest U.S. tech deal in history.
In a filing with the U.S. Securities and Exchange Commission, Microsoft wrote, “Activision Blizzard is a leader in game development and an interactive entertainment content publisher. The acquisition will accelerate the growth in our gaming business across mobile, PC, console, and cloud gaming.”
Microsoft did not respond to a request for comment.
In January, the Verge, an online publication, published an internal memo from Phil Spencer, the chief executive officer of Microsoft Gaming, laying out the company’s plans to cut the size of its workforce following the acquisition.
“We have made the painful decision to reduce the size of our gaming workforce by approximately 1,900 roles out of the 22,000 people on our team,” the memo stated. “We will provide our full support to those who are impacted during the transition including severance benefits informed by local employment laws.”
In addition to the layoffs in Novato, the state’s latest WARN notice — the acronym refers to the Worker Adjustment and Retraining Notification Act — contains an additional 812 Activision layoffs effective on March 30 throughout the state: 478 in Irvine, 209 in Santa Monica, 76 in San Mateo and 49 in Woodland Hills.
Challenger, Gray and Christmas, an executive outplacement firm in Chicago, reported in January that the tech sector “led all industries in job cut announcements last year with 168,032, up 73% from the 97,171 cuts announced in 2022.”
It’s estimated that the video game industry alone had 6,000 job cuts in 2023.
“The tech sector will continue to be impacted by the onset of AI, mergers and acquisitions, and realigning of resources and talent,” the report said.
The layoffs have continued this year, with Google cutting about a thousand employees; Twitch, an interactive livestreaming service that includes gaming content, laying off 500 employees, a third of its staff; and Amazon firing hundreds of workers at Amazon Prime Video and MGM Studios.
Mike Blakeley, chief executive officer of the Marin Economic Forum, a public-private partnership designed to foster growth in the county, wrote in an email that the layoffs are “consistent with trends in the corporate sector nationwide; business restructuring to reduce costs, along with greater consolidation.”
Game companies’ revenues skyrocketed during the pandemic when people were sheltering in their homes with a limited number of entertainment options. Some companies expanded too fast, thinking that the good times would last forever.
Marin has had several video game companies come and go over the years. One notable example is Lucasfilm Games, which got its start as LucasArts Entertainment in San Rafael in 1982 before moving to San Francisco’s Presidio with other Lucas companies in 2005.
Another is Telltale Games, founded in San Rafael in 2004. Telltale grew rapidly because of the popularity of its adaption of “The Walking Dead” graphic novel before laying off nearly all of its 275 employees in September 2018.
According to the Marin Economic Forum, the number of people employed in digital media in Marin decreased by more than 8%, to 2,224, between March 2017 and March 2021.
Nevertheless, an economic vitality strategy produced by the Marin Economic Forum and adopted by county supervisors in August 2022 identified information technology and digital media as one of six sectors poised for growth in the next five years.
“It remains a key sector of the economy and despite the recent news, it remains a growth opportunity for Marin given our talent and expertise in the sector,” Blakeley said.