On July 20, the California Department of Fair Employment and Housing filed a lawsuit against Activision Blizzard, accusing it of discriminating against its female workforce and encouraging a “frat boy” workplace culture. It’s been tumultuous five months for the gaming giant since the lawsuit was filed, culminating in a Tuesday report from the Wall Street Journal that puts CEO Bobby Kotick’s future with the company in doubt.
Referring to internal documents and persons familiar with the matter, the Journal reports that Kotick was aware of several regarding workplace issues in the company, including the rape of a woman by her superior, but did not disclose this knowledge to Activision Blizzard’s board.
An alliance of workers across Activision Blizzard has responded by demanding Kotick be replaced as CEO. It organized a strike that took place on Tuesday, attracts over 150 people.
Activision Blizzard is one of the largest gaming companies in the world. It owns Call of Duty, World of Warcraft, Diablo, Crash Bandicoot and many more hugely popular franchises and recorded $ 2.2 billion in profits last year. Here’s everything you need to know about the evolving situation.
What is Activision Blizzard accused of?
DFEH’s case accuses Activision Blizzard of discrimination in the workplace. It claims that women are being compensated unfairly – paid less for the same job, examined more closely than their male peers – and subjected to significant harassment. The agency called Activision Blizzard a “breeding ground for harassment and discrimination” in which women are subjected to regular sexual advances from (often senior) men who remain largely unpunished.
Illustrative of the allegations DFEH makes against Activision is an office ritual referred to as a “cube crawl” in which men allegedly drink “copious” amounts of alcohol, crawl through office booths and engage in “inappropriate behavior”, including groping. The lawsuit describes incidents, including allegations that a female employee committed suicide during a business trip as a result of a toxic relationship with a supervisor.
“Women and girls now make up almost half of gamers in America, but the gaming industry continues to cater to men,” the suit reads. “Unfortunately, Activision-Blizzard’s double-digit percentage growth, 10-digit annual revenue and recent diversity marketing campaigns have not changed much.”
What was the reaction?
After DFEH filed a lawsuit, Activision responded to Blizzard with a lengthy statement saying the department had filed a hasty, inaccurate report with “distorted and in many cases false descriptions of [Activision Blizzard’s] previously. “In an email sent to staff, published by Bloomberg’s Jason Schreier, Vice President of Corporate Affairs Frances Townsend said it presented “a distorted and untrue picture of our business, including factually incorrect, old and out of context stories – some from more than a month ago.”
These statements apparently did not satisfy employees, neither current nor past. Over 2,000 of them signed an open letter to Activision Blizzard’s management, criticizing the company’s response.
The letter signed by the employees made three demands. First, that the company issues statements acknowledging the seriousness of the allegations. Second, that Townsend is resigning from his role as Executive Sponsor of the ABK Employee Women’s Network. Third, Activision Blizzard’s senior management works with employees to ensure a safe work area to “speak out and come forward.”
Alongside the open letter signed by over 2,000 employees, workers at the company planned a strike on July 28. In an effort to be more cooperative with aggrieved workers, Activision Blizzard sent an email to staff saying they would be paid time off to participate in the protest.
Hundreds of employees accepted the offer as they set up a strike line outside Activision Blizzard’s headquarters in Irvine, California. Employees held signs that read “every voice matters,” “fight villains in the game, fight villains IRL” and “nerf male privileges.” (When developers weaken characters in games like Overwatch, it’s known as “nerfing” them.)
In October, Activision Blizzard said it was making changes to improve its workplace culture, including a new “zero-tolerance” harassment policy and ending the required arbitration of allegations of sexual harassment and discrimination. Kotick also said he would reduce his salary to $ 62,500 to ensure that “all available resources” were used to improve the workplace. Earlier this year, shareholders reportedly approved a $ 155 million salary package for Kotick.
Why is there pressure on Kotick?
Amid staff demands, Activision Blizzard CEO Bobby Kotick issued a letter on July 27 addressing the matter and staff concerns. “Our initial reactions to the problems we face together, and to your concerns, were frankly tone-deaf,” it reads. “We take swift steps to be the compassionate, caring company you came to work for, and to ensure a safe environment. There is nowhere in our company for discrimination, harassment or unequal treatment of any kind.”
Contrary to those words, the Journal’s Tuesday report said Kotick was aware of many of the issues outlined by the case. People with knowledge of the case told the Journal that Kotick failed to inform the company’s board of directors of “everything he knew” about some incidents, including a settlement in 2018 with a former employee of one of Activision’s studios, who was allegedly raped by a supervisor.
The report also shed light on the impending departure of Blizzard Entertainment’s co-head Jen Oneal, who is leaving the company just months after taking on the role alongside former Xbox director Mike Ybarra. In an email sent to Activision’s legal team in September, Oneal said she had been sexually harassed earlier in her career with the game producer and was paid less than her male co-owner, according to the Journal.
Another revelation was that the company-wide memo circulating by Townsend, which was rejected by employees and described by Kotick as “tone deaf”, was in fact written by Kotick himself.
A spokesman for Activision Blizzard said the company is “disappointed in the report, which it said” presents a misleading view of Activision Blizzard and our CEO. “
“The WSJ is ignoring important changes underway to make this the industry’s most welcoming and inclusive workplace,” the spokesman said. “At Mr. Kotick’s management, we have made significant improvements, including a zero-tolerance policy for inappropriate behavior. And that is why we are moving forward with unwavering focus, speed and resources to continue to increase diversity across the board. our company and industry and ensure that every employee comes to work and feels valued, safe, respected and inspired. We do not stop until we have the best workplace for our team. “
Has anyone resigned?
A work stoppage organized by A Better ABK, a workers’ alliance representing employees of Activision, Blizzard and Kings, which also falls under the Activision Blizzard umbrella, organized another work stoppage calling for Kotick’s resignation.
Kotick would not be the first senior figure to be knocked down by this scandal. On August 3, two weeks after DFEH’s case was brought, it was announced that Blizzard President J. Allen Brack had resigned. Brack started with Blizzard in 2006, and had been president since 2018. Prior to that, he was executive producer of World of Warcraft, Blizzard’s most successful game. DFEH’s lawsuit claims that Brack was aware of the toxic culture at Blizzard.
Former Vicarious Visions leader Jen Oneal and former Xbox director Mike Ybarra have been announced as his successors. As mentioned above, Oneal will end the business at the end of 2021. During his time at the company, Oneal had overseen the Blizzard games Diablo and Overwatch.
Activision Blizzard said in October that it had fired 20 employees as part of its effort to address the cultural issues in the workplace outlined by employees and DFEH.
Activision vs. EEOC
In addition to the ongoing case with the California Department of Fair Employment and Housing, the US Equal Employment Opportunity Commission (EEOC) launched actions against Activision Blizzard in late September. Almost instantly, Activision Blizzard revealed that it had settled the case for $ 18 million.
According to a statement from Activision Blizzard, the funds will be used to compensate victims or otherwise donate to charities, “promoting women in the video game industry or raising awareness about harassment and gender equality issues.”
“There is no place in our company for discrimination, harassment or unequal treatment of any kind,” Kotick said at the time. “I’m sorry that someone had to experience inappropriate behavior, and I remain unwavering in my commitment to making Activision Blizzard one of the world’s most inclusive, respected and respectful workplaces.”