Ubisoft Rehaul and Layoffs Demanded by Minor Stakeholder

Following a string of underperforming releases and setbacks, Ubisoft faces pressure from an investor demanding a management overhaul and staff reductions.

Minority Investor Calls for Ubisoft Restructuring

Aj Investment Claims Last Year's 10% Layoffs Insufficient

Aj Investment, a minority shareholder, has publicly urged Ubisoft's board, including CEO Yves Guillemot and Tencent, to take the company private and install new leadership. In an open letter, the investors expressed profound dissatisfaction with the company's performance and strategic direction.

The letter cited the delayed release of key titles like Rainbow Six Siege and The Division until March 2025, alongside a lowered Q2 2024 revenue forecast and overall poor performance, as major concerns. Aj Investment specifically proposed replacing Guillemot as CEO, stating their desire for "a new CEO who will optimize costs and studio structure for a more agile and competitive company."

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

Aj Investment further argued that Ubisoft's low valuation relative to competitors stems from mismanagement and that shareholders are being exploited by the Guillemot family and Tencent. They criticized the company's focus on short-term gains rather than long-term strategic planning to deliver exceptional gaming experiences.

Aj Investment's Juraj Krupa also expressed disappointment over the cancellation of The Division Heartland and criticized the reception of Skull and Bones and Prince of Persia: The Lost Crown, deeming them underwhelming. He pointed out the underutilization of popular franchises like Rayman, Splinter Cell, For Honor, and Watch Dogs, and noted concerns about the rushed release of Star Wars Outlaws despite high anticipation.

Ubisoft had heavily relied on Star Wars Outlaws to revitalize its performance, but the game's underperformance contributed to a recent share price decline, reaching its lowest point since 2015 and marking a drop of over 30% year-to-date.

The letter also advocated for significant staff reductions, citing 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 contrasts sharply with EA's 11,000, Take-Two's 7,500, and Activision Blizzard's 9,500.

Krupa stressed the need for aggressive cost-cutting and staff optimization to enhance operational efficiency. He also suggested selling underperforming studios to streamline operations. He highlighted Ubisoft's extensive network of over 30 studios as a factor contributing to its inefficiencies. While acknowledging previous layoffs (approximately 10% of the workforce), Krupa asserted that these measures were insufficient, urging more decisive action to maintain competitiveness in the global gaming market.