Blizzard Versailles employees continue to fight studio's closure

Former Blizzard Versailles employees are still negotiating their redundancy terms after the branch closed last year, with Activision Blizzard still embedded in legal investigations related to the closure.

An in-depth investigation by French publication Gamekult into the closure of Blizzard Versailles pointed to several issues that are still unresolved, after 400 people were made redundant between 2018 and 2020 at Blizzard's French branch.

A verdict from the Tribunal Administratif de Versailles is awaited in the next couple of weeks concerning Blizzard's latest 'plan de sauvegarde de l'emploi' (PSE), filed in 2020, and whether it was justified.

A PSE is a legal framework in French law that typically aims at limiting the number of redundancies (or preventing them altogether) at a company struggling financially. It's also more generally the term being used when a wave of redundancies is planned by a company. It needs to be legally validated by a governmental structure called DIRECCTE.

Gamekult's report detailed the legal issues Blizzard has been facing since closing the branch, as it was trying to justify the financial need for it.

Blizzard Versailles' first PSE in 2019, which saw 134 people targeted in the midst of a global wave of redundancies at the company, was actually invalidated by the tribunal. The latter said Blizzard didn't do enough forward planning that could have prevented redundancies, and pointed to a lack of proof concerning alleged financial difficulties at the subsidiary.

At the time, the company had justified the redundancies by saying that it was to maintain its competitiveness in a changing market, despite record breaking financial results internationally.

The company was still allowed to go ahead with the redundancies despite the PSE being invalidated, with two consequences: employees would automatically win if they went to a labour court to appeal their redundancy terms, and the company was to be under increased scrutiny if a second PSE was to be announced, which was the case in 2020.

The second wave targeted 264 employees and closed the studio entirely, with Blizzard Versailles' internal work council ('Comité Social et Économique' in French, or CSE) criticising the decision.

"We told leadership that we were not in a critical situation," one of Gamekult's sources, a member of the CSE, said. "Even if they were concerned about Blizzard's competitiveness, at some point you need to stop joking around: we generate billions in revenue between Activision, Blizzard and King, with huge margins, so what was the point of doing a PSE during an economic and health crisis which would lead to people being jobless and struggling to find work? Why not wait? They wouldn't let go of it. I think it was just an excuse as they wouldn't be noticed in the middle of all the other companies who were laying staff off at that time."

The CSE contested the legality of the PSE due to irregularities in the procedure and challenged the necessity to close the Versailles branch for economic reasons. An expert assessment was conducted, Gamekult reported, which also unearthed tax avoidance issues between 2011 and 2018.

Gamekult said the report shows that Activision Blizzard was hiding how profitable the Versailles office was, transferring some of the profit to its parent company in the Netherlands, and created a new office in London to transfer some of its IP rights there to benefit from tax rebates.

According to Activision Blizzard's latest annual report, the publisher paid $179 million (including penalties and interest) to the French Tax Authority in January of 2020 to settle issues regarding its tax filings from 2011 through 2018. The publisher said the issues stemmed from "transfer pricing for intercompany transactions involving one of our French subsidiaries."

The final verdict about whether or not the PSE was justified is awaited in the next couple of weeks. Some of it has already been partly invalidated by the French labour inspection agency, which said economic reasons did not justify all of the redundancies at Blizzard Versailles.

Gamekult reached out to Blizzard's leadership in France and Activision Blizzard EMEA, both of which declined to comment.

GamesIndustry.biz reached out to Activision Blizzard for comment.