Ubisoft Rehaul and Layoffs Demanded by Minor Stakeholder

Following a string of disappointing game releases and underperformance, Ubisoft faces pressure from a minority investor, Aj Investment, to restructure its management and workforce.

Aj Investment Calls for Ubisoft Restructuring

Previous Layoffs Insufficient, Investor Claims

Aj Investment, a significant minority shareholder, has publicly demanded that Ubisoft go private, install new leadership, and significantly reduce its staff. In an open letter to the Board of Directors, including CEO Yves Guillemot and Tencent, the investor expressed deep dissatisfaction with the company's current performance and strategic direction.

The letter cites the delay of key titles like Rainbow Six Siege and The Division until late March 2025, alongside lowered Q2 2024 revenue projections and overall poor performance, as major concerns. Aj Investment directly proposed a CEO replacement for Guillemot, stating a need for "NEW CEO who will optimise the cost and studio structure for more agile and competitive company."

This pressure has impacted Ubisoft's stock price, which reportedly plummeted over 50% in the past year, according to the Wall Street Journal. Ubisoft has yet to officially respond to the letter.

Aj Investment contends that Ubisoft's low valuation relative to competitors stems from mismanagement and the undue influence of the Guillemot family and Tencent. The investor criticizes the company's focus on short-term financial results over long-term strategic planning and delivering exceptional player experiences.

Aj Investment's Juraj Krupa further criticized the cancellation of The Division Heartland, the underwhelming reception of Skull and Bones and Prince of Persia: The Lost Crown, and the perceived underperformance of Star Wars Outlaws, despite high expectations. 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.

The letter also proposes significant staff reductions, pointing to the higher revenue and profitability of competitors like Electronic Arts, 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 aggressive cost-cutting and staff optimization to improve operational efficiency, suggesting the sale of studios not crucial to core IP development. He notes Ubisoft's 30+ studios as an overly large and inefficient structure. While acknowledging previous layoffs (approximately 10% of the workforce), Krupa insists that further, more substantial cuts are necessary to maintain competitiveness. He also states that the company's announced cost-cutting measures are insufficient.