Ubisoft Rehaul and Layoffs Demanded by Minor Stakeholder

Following several setbacks and disappointing performance of recent releases, Ubisoft faces pressure from an investor demanding a management overhaul and staff reductions.

Ubisoft Minority Investor Calls for Company Restructuring

Aj Investment Claims Last Year's 10% Workforce Reduction Insufficient

Minority investor Aj Investment has publicly urged Ubisoft's Board of Directors, including CEO Yves Guillemot and Tencent, to take the company private and install new leadership. In an open letter, they expressed deep dissatisfaction with the company's performance and strategic direction.

The letter cites the delayed release of key titles like Rainbow Six Siege and The Division to late March 2025, alongside lowered Q2 2024 revenue projections and overall poor performance, as major concerns. Aj Investment specifically proposed replacing Guillemot as CEO, stating: "Change of the current management. Start hiring process of NEW CEO who will optimise the cost and studio structure for more agile and competitive company as Ubisoft should be."

This pressure has impacted 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 contends that Ubisoft's low valuation compared to competitors stems from mismanagement and the perceived advantage taken by the Guillemot family and Tencent. They criticize the focus on short-term quarterly results over long-term strategic planning and delivering exceptional player experiences.

Aj Investment's Juraj Krupa further criticized the cancellation of The Division Heartland, a highly anticipated title. He also expressed disappointment with the reception of Skull and Bones and Prince of Persia: The Lost Crown, deeming them underwhelming.

Krupa highlighted the underperformance of several established franchises: "Rainbow Siege is doing great, nevertheless franchises such Rayman, Splinter Cell, For Honor, Watch Dogs are sleeping for years despite these games are loved by millions of players all around the world," he noted. He also pointed to the less-than-perfect launch of Star Wars Outlaws, despite high anticipation, citing less-than-stellar reviews.

Ubisoft's reliance on Star Wars Outlaws to revitalize its fortunes proved unsuccessful, contributing to a share price decline to its lowest point since 2015, adding to a greater than 30% drop since the start of the year.

Krupa also advocated for significant staff reductions, drawing comparisons to competitors like Electronic Arts (EA), Take-Two Interactive, and Activision Blizzard, which achieve higher revenues and profitability with smaller workforces. Ubisoft's 17,000+ employees contrast sharply with EA's 11,000, Take-Two's 7,500, and Activision Blizzard's 9,500.

Krupa urged Ubisoft to implement cost-cutting measures and staff optimization to improve operational efficiency, suggesting the sale of studios not crucial to core IP development. He stated that Ubisoft's 30+ studios represent an overly large and inefficient structure. While acknowledging previous layoffs (approximately 10% of the workforce), he stressed that further action is necessary to remain competitive. He noted that Ubisoft’s planned cost reductions of €150 million by 2024 and €200 million by 2025 are insufficient.