Microsoft bets big that they can fix Activision Blizzard’s culture of trouble

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For months, Activision Blizzard (ATVI) was pressured to reform its workplace culture. A July lawsuit from a California government agency alleges the game giant has enabled a “twin brother” culture and claims leadership and human resources officers turned a blind eye to complaints by the game giant. female staff. At the time, the company criticized the lawsuit as “misrepresentation”. Now, in addition to acquiring the company behind popular video games like Call of Duty and World of Warcraft, Microsoft (MSFT) can also inherit many problems at work. Activision Blizzard employees held tutorials about what they saw as its inadequate response to overhaul a toxic workplace and called for the resignation of the company’s CEO, Bobby Kotick. And they were committed to continue advocating for change under new ownership.

Additionally, there is a group of employees at an Activision-owned studio that is pushing for consolidation in a rare move for the industry. A union would be the first for the game company and for Microsoft employees based in the US. The effort is largely fueled by what workers see as a lack of transparency, having recently laid off their department.

Some labor experts also think the blockbuster deal could have a spillover effect by alienating some Microsoft employees.

Y-Vonne Hutchinson, founder of integration consulting firm ReadySet, told CNN Business: “It says the profit motive will outweigh those potential liabilities. “It said, ‘We’re willing to bring in this company that has a lot of cultural problems – where there are rape claim, where accusations of sexism, sexual harassment are entrenched — we’re open to bringing that issue into play if it’s not resolved. “Bobby Kotick, CEO of Activision Blizzard, attends Allen & amp; Sun Valley Corporate Conference in July 2019 in Sun Valley, Idaho. Hutchinson, author of the forthcoming book “How to Talk to Your Boss About Race,” also called attention to Kotick’s optics that are likely to get a big payout from the agreement. Kotick is now earned 390 million dollars when the acquisition closes in Microsoft’s fiscal year 2023. (Kotic is reported is expected to stay in his role until the deal is passed, and then step down.)

“It can be a message that is discouraging and one that is not rooted in inclusive values,” Hutchinson added.

Microsoft CEO Satya Nadella said culture is his “number one priority” as he stressed the importance of adapting Activision Blizzard’s workplace during a conference call discussing the acquisition on Thursday. last week. Nadella said Microsoft is “supportive” of the work Activision Blizzard is doing, noting that once the deal closes, Microsoft will have “a lot of important work to do to continue to build a culture where people are.” Everyone can do their best work. “”

“The success of this acquisition will depend on it,” added Nadella.

Can Microsoft fix and preserve Activision’s culture?

Before the deal was announced, Activision Blizzard was criticized for what workers and shareholders called an inadequate response to issues that have emerged in recent months.

Dieter Waizenegger, chief executive officer of Strategic Organization Center Investment Group, a Active shareholder in Activision Blizzard, joined workers in pressuring Kotick to step down, along with several longtime members of the board who are preparing to renew. Waizenegger said Kotick’s removal is now “less pressing”, but ensuring “a truly independent board can oversee management” is crucial. (Activate Snowstorm announced in November, a “workplace accountability committee”, consisting of two independent directors, to oversee progress in improving workplace culture.)

He said the company has so far appeared “very reluctant to disclose its current efforts.” “The longer these problems linger, the harder it is for Microsoft to fix them,” he added.

In a statement to this article, Activision Blizzard spokeswoman Jessica Taylor said the company’s “top priority” was to “create a workplace culture where everyone feels supported, safe, and secure.” safe and welcoming with the goal of becoming an industry leader in excellence.”

“Over the past few months, we’ve announced a number of impactful measures and commitments, but we know our work is far from done,” the statement said.

Microsoft Deal to Offer $390 Million Salary Day to Activision's Glamor CEOSince the lawsuit in July, Activision Blizzard has announced changes such as leadership change, including the departure of the president and head of human resources, adopted a “zero-tolerance policy of harassment, “expanded employee relations and the compliance team, and said it would ‘waive’ the arbitration requirement for employees who wish to bring complaints of sexual harassment or discrimination in future. 18 million dollars to settle a case with the U.S. Equal Employment Opportunity Commission about sexual harassment and discrimination courts, as well as promised slow update It says it’s meant to “rebuild” employee trust.

Waizenegger notes that the hope is that Microsoft will “push it” further. At the very least, he said, Microsoft should take some of the same measures it used to review its culture and policies after allegations of inappropriate workplace behavior by its founder. and former CEO Bill Gates recently emerged from the 2000s. (CNN has not independently confirmed all of the allegations.)

Earlier this month, Microsoft’s board of directors said hired an outside law firm to conduct a review pursuant to an advisory shareholder resolution and intends to make the findings public. Activision Blizzard management says it has hired WilmerHale, a protect the company to conduct an investigation. Waizenegger says it’s not enough to “get to the root” of its problems.

Microsoft Gaming CEO Phil Spencer acknowledged the challenges when the acquisition was announced, stressing the importance of “treating everyone with dignity and respect. … We aspire to be. extending a proactive culture of inclusion to major teams across Activision Blizzard.”

Exactly how it is intended, however, is unclear. Microsoft declined to comment.

Employees gathered for a walk at the Activision Blizzard offices in Irvine, California, U.S., on Wednesday, July 28, 2021.

Hutchinson noted that Microsoft must be especially careful in its treatment of Activision Blizzard. Hutchinson said Activision Blizzard has the potential to become a “retail division within Microsoft” due to the popularity of their products, but the priority is to address their cultural issues. Otherwise, she noted, Microsoft risks “doing it financially and strategically on a problem division.”

By bringing in Activision, Microsoft could also open the door to closer scrutiny of its own culture, following a wave of headlines about Gates’ statements last year, and to antitrust re-surveillance following years went largely unnoticed. What’s more, Microsoft may face a different level of worker positivity than they’re used to – and this level may only continue to grow in the coming months.

The group of workers at Activision Blizzard-owned studio Raven, who are planning to merge, expressed disappointment on Tuesday that the game company did not voluntarily recognize their union when given the opportunity. . (Activision Blizzard spokeswoman Jessica Taylor said in a statement that it had “reviewed and considered carefully” the union’s request but that “the parties were unable to reach an agreement.”

In an interview After the acquisition was announced, Microsoft’s Spencer admitted that he didn’t “have much personal experience with unions.” After a Twitter user pointed out this comment last week, an account representing a group of Activision workers feedback that it would “like” to get to know him.

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