Activision CEO tells employees he’s considering leaving, says Dow Jones

(Bloomberg) — Activision Blizzard Inc.’s CEO said. Bobby Kotik told top managers last week that he would consider leaving the video game company if he was not able to quickly resolve cultural issues, Dow Jones reported, citing people familiar with the comments.

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Kotick did not rule out the possibility of his departure if the company’s misconduct issues were not resolved “quickly,” said the people, who were not identified by Dow Jones.

The comment came after an article in the Wall Street Journal claimed last week that the CEO was aware of allegations of sexual harassment and assault against female employees, including rape, but failed to report them to the board of directors, prompting criticism from employees, investors and business partners. .

“It will only prolong the uncertainty” and “hamper rebuilding and restoring morale and productivity,” Matthew Thornton, an analyst at Trust Securities, wrote in a report last week, adding that the company would likely change its CEO, which is positive.

Activision did not immediately respond to an email inquiry seeking comment on the Dow Jones report on Sunday. In a statement after a previous newspaper article, the company said the board of directors was confident Kotick had “appropriately addressed the workplace issues to which it is bringing to its attention.”

The company, known for successful video games such as Call of Duty and World of Warcraft, has been in turmoil since the summer, when it was sued by the California Department of Employment and Housing over allegations of sexual harassment, pay inequality and retaliation.

The agency described the company’s “little boy culture” and accused the leadership of failing to take action. Kotick’s ordeal worsened when the US Securities and Exchange Commission later launched its own investigation into how the company handled reports of misconduct.

Read: Activision CEO Kotick’s Mistake in Handling Employee Misconduct

A group of institutional investors is also suing Activision in Delaware over allegations that the video game giant’s “brotherhood” culture in the 1980s made it a consistently toxic place for women to work.

Activision Kotick employees called for resignation and organized a strike on the company’s campus in Santa Monica on Tuesday after the Journal article.

The video game giant is also facing pressure from business partners. Microsoft Corp. head of Xbox Phil Spencer said he is “evaluating all aspects of our relationship with Activision Blizzard and making ongoing proactive adjustments,” in light of recent revelations from the video game publisher.

In an email to employees seen by Bloomberg News, Spencer said he and the games leadership team are “disturbed and deeply disturbed by the horrific events and actions” at Activision, referring to the Journal report.

Activision shares have lost a third of their value this year, compared to a 25% gain in the S&P 500.

JPMorgan analyst Alexia Quadrani cut the stock’s recommendation to neutral from overweight last week, citing the growing controversy over Kotick. “Recent negative headlines introduce a great deal of uncertainty into this story,” Kadrany said, adding, “We don’t expect stocks to outperform until there is clarity on this issue.”

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