Ubisoft Rehaul and Layoffs Demanded by Minor Stakeholder

Ubisoft Faces Investor Pressure for Restructuring and Layoffs

Following a string of underperforming releases and setbacks, Ubisoft is facing intense pressure from a minority investor, Aj Investment, to overhaul its management and reduce its workforce.

Aj Investment Calls for Major Changes at Ubisoft

In an open letter, Aj Investment, a significant minority shareholder, expressed profound dissatisfaction with Ubisoft's performance and strategic direction. The investor cited the delayed release of key titles, lowered revenue projections, and overall poor performance as reasons for concern regarding the management's long-term viability. The letter proposed a complete management change, including the replacement of CEO Yves Guillemot, advocating for a new CEO to optimize costs and streamline studio operations for increased agility and competitiveness.

Ubisoft's Share Price Plummets

The investor's criticism has resulted in a significant drop in Ubisoft's share price, reportedly falling over 50% in the past year, according to the Wall Street Journal. Ubisoft has yet to publicly respond to the letter.

Aj Investment Critiques Ubisoft's Strategy and Performance

Aj Investment contends that Ubisoft's low valuation is due to mismanagement and that shareholders are being disadvantaged by the Guillemot family and Tencent. The investor criticized the company's focus on short-term gains rather than long-term strategic planning to deliver exceptional gaming experiences. Specific criticisms included the cancellation of The Division Heartland, and the underwhelming reception of Skull and Bones and Prince of Persia: The Lost Crown. While acknowledging the success of Rainbow Six Siege, Aj Investment highlighted the underutilization of other popular franchises like Rayman, Splinter Cell, For Honor, and Watch Dogs. The investor also pointed to the less-than-perfect launch of Star Wars Outlaws, despite high expectations, as further evidence of mismanagement.

Call for Staff Reductions and Studio Restructuring

Aj Investment's letter also called for significant staff reductions, drawing comparisons to more profitable competitors like Electronic Arts, Take-Two Interactive, and Activision Blizzard, which achieve higher revenue and profitability with smaller workforces. The investor suggested that Ubisoft's 17,000+ employees are excessive compared to its competitors and urged the company to implement cost-cutting measures and staff optimization. Furthermore, Aj Investment recommended the sale of studios deemed unnecessary for the development of core IPs, citing Ubisoft's 30+ studios as an overly large and inefficient structure. While acknowledging previous layoffs, Aj Investment stressed that these were insufficient to address the company's challenges and urged more aggressive cost-cutting measures.