Activision Blizzard focused on the bottom line—and women paid the price

Are any of your star employees making life unbearable for their coworkers?

That’s not just a theoretical question, as a new story in Fortune lays out. Courtney Rubin spoke to 29 current and former employees of Activision Blizzard, the insanely successful gaming company that Microsoft is in the midst of trying to acquire. 

But her story isn’t about the deal, it’s about the culture that was allowed to flourish over three decades inside Activision Blizzard, and how a laser focus on the bottom line can obscure much bigger problems that in this case have come back to bite Activision Blizzard in the form of lawsuits. One logged by California’s Department of Fair Employment and Housing (DFEH) alleges gender discrimination, harassment, and retaliation.

The U.S. Equal Opportunity Employment Commission also filed suit against the company in September for sexual harassment and pregnancy discrimination. (Activision has denied “all allegations of wrongdoing,” and said it had agreed to a settlement with DFEH to avoid “the expense, distraction and possible litigation associated with such a dispute”.)

Rubin’s reporting paints a picture of a company where profits often trumped people. Once Blizzard realized it had a hit on its hands with the game World of Warcraft, Rubin writes, “Developers were suddenly rock stars complete with adoring fans (Blizzard held its first fan convention, BlizzCon, in 2005) and company parking lots suddenly began to be dotted with Lamborghinis.” 

Cher Scarlett, a former Blizzard software engineer, says a star World of Warcraft developer groped her at a Blizzard wrap party, and that she was told by a friend who’d had the same man grope her at BlizzCon the year before: “He’s a drunk idiot and he does that all the time.” (The amended complaint referred to this employee as “a blatant example” of the company’s “refusal to deal with a harasser because of his seniority/position.”)

Indeed, the alcohol-fueled culture served as an accelerant to bad behavior, with Rubin noting that drinking was “as integral to Blizzard’s culture as late-night Dungeons & Dragons sessions. “Cube crawls”—which were also cited in the complaint—might include Jell-O shots and vodka-soaked gummy bears, starting at 4 p.m. and going on until 2 or 3 in the morning, say former employees. Beers with lunch were not uncommon, nor was other daytime drinking.” (Activision sent Fortune a list of 15 recent changes it had instituted to improve workplace conditions, including a November policy to ban alcohol in the workplace, and waiving required arbitration of individual sexual harassment and discrimination claims.)

In later years, Blizzard took steps to try and empower women and make the workplace safer for them. “I feel like Blizzard was genuinely trying to help,” says one current employee. “But I think they were afraid to tackle the true problem of sexual harassment in the frat boy culture.”

This past summer, the company’s response to the DFEH complaint inspired a 300 employee walkout with employees holding signs reading “Believe Her” and “Play Fair.” The swirl of workplace revelations and lawsuits opened the doors for Microsoft’s move to acquire the company, a deal which was announced in mid-January.  

In the end, having an eye on the bottom line is critical. But the Activision Blizzard story is a case study in what can happen when you do so at the expense of what is most important—your own employees. You can read the full story here. 

---

See you tomorrow.

Sheryl Estrada
[email protected]

Big deal

Lululemon Athletica's (Nasdaq:LULU) 10-market study benchmarks the state of wellbeing with the Global Wellbeing Index and explores what supports holistic health. Wellbeing is linked with a return to activities, including a return to a healthy workplace environment, the research found. Those who've already returned to the workplace scored an average of 70 on the wellbeing index, compared to those who have not yet returned scoring an average of 64. However, 53% of employees are equally worried about COVID-19 exposure and having less personal time (52%). The index, based on a survey of 10,000 general population adults globally, gauges how people feel across the physical, mental, and social dimensions of wellbeing.

Courtesy of Lululemon Athletica

Going deeper

Big companies are already collecting important data on workforce diversity. More of them need to make it public, a Fortune opinion piece by Ashley Marchand Orme, director of Corporate Equity at JUST Capital, argues that more companies should disclose their EEO-1 Reports. "It’s a standardized way to report intersectional diversity data," Orme writes. "That means it becomes easier to understand trends in how companies engage with workers based on overlapping categorizations of gender, race, ethnicity, and job category. Comparisons in workforce diversity, then, become an apples-to-apples exercise."

Leaderboard

Dawn Allen was named CFO at Tate & Lyle PLC, effective May 16. Allen joins the company from Mars Incorporated, where she has been global CFO and VP of global transformation since 2020. Prior to that, during a 25-year career at Mars, she has held a number of senior financial roles in Europe and the U.S. including global divisional CFO, food, drinks and multi-sales and regional CFO, Wrigley Americas.

Zac Coughlin was named EVP and CFO at PVH Corp. (NYSE:PVH), effective April 4. Coughlin joins PVH from DFS Group Limited, where he served as Group CFO and COO. Prior to joining DFS, Coughlin was CFO at Converse, Inc., a division of Nike, Inc., He started his career with Ford Motor Company where he held multiple global financial leadership roles.

Overheard

"As perspective, in most parts of the country, you can still get a chicken burrito — and that's what more than half of our customers get — for less than $8."

—Chipotle CFO Jack Hartung on why he thinks inflation-driven price increases aren't making the company's food too expensive, as told to Yahoo Finance Live.