Ubisoft Rehaul and Layoffs Demanded by Minor Stakeholder

Following a string of disappointing game releases and poor financial performance, Ubisoft faces pressure from a minority investor to restructure its management and workforce.

Minority Investor Demands Ubisoft Overhaul

Aj Investment Claims 10% Workforce Reduction Insufficient

Aj Investment, a minority shareholder in Ubisoft, has publicly urged the company's board, including CEO Yves Guillemot and Tencent, to take the company private and install new leadership. In an open letter, the investors expressed deep dissatisfaction with Ubisoft's current strategic direction and performance.

The letter cites the delayed release of key titles like Rainbow Six Siege and The Division until late March 2025, alongside a lowered revenue forecast for Q2 2024, as major concerns. Aj Investment directly challenged Guillemot's leadership, proposing a new CEO to improve cost management and studio structure for enhanced competitiveness.

This call for change follows a significant drop in Ubisoft's share price, reportedly plummeting over 50% in the past year, according to the Wall Street Journal. Ubisoft has yet to publicly respond to the letter.

Aj Investment contends that Ubisoft's low valuation compared to its competitors stems from mismanagement and the perceived undue influence of the Guillemot family and Tencent. They criticize the company's focus on short-term financial gains over long-term strategic planning and delivering exceptional gaming experiences.

Aj Investment's Juraj Krupa further criticized the cancellation of The Division Heartland, the underwhelming performance of Skull and Bones and Prince of Persia: The Lost Crown, and the perceived rushed release of Star Wars Outlaws, despite high anticipation. He also highlighted the underutilization of popular franchises like Rayman, Splinter Cell, For Honor, and Watch Dogs.

Ubisoft's reliance on Star Wars Outlaws to revitalize its fortunes has seemingly backfired, contributing to the company's share price falling to its lowest point since 2015, a drop exceeding 30% year-to-date.

The letter also proposes significant staff reductions, citing the higher revenue and profitability of competitors like EA, Take-Two Interactive, and Activision Blizzard, despite employing fewer staff. Ubisoft's workforce of over 17,000 is contrasted with EA's 11,000, Take-Two's 7,500, and Activision Blizzard's 9,500.

Krupa advocates for substantial cost-cutting and staff optimization to boost operational efficiency, suggesting the sale of studios not crucial to developing core IPs. He points to Ubisoft's 30+ studios as an excessively large and inefficient structure. While acknowledging previous layoffs (approximately 10% of the workforce), Krupa insists these measures are insufficient and that the announced cost-cutting targets are not aggressive enough to ensure long-term competitiveness.