What happened
Shares of video game giant Activision Blizzard (ATVI +0.00%) are slumping 4% as of 2:55 p.m. EDT Tuesday, after the company announced a change in management.
This morning, Activision President Daniel Alegre said he was "pleased to announce" that development executive vice president Jen Oneal and platform and technology executive vice president Mike Ybarra have been appointed "co-leaders of Blizzard," replacing that division's current president, J. Allen Brack.
Image source: Getty Images.
So what
It was a short announcement, heavy on relating Oneal and Ybarra's respective qualifications, but light on specifics for why Brack is leaving the company. Fortunately, other media filled in the blanks for us.
Variety, for example, points out today that just two weeks ago, the California Department of Fair Employment and Housing filed suit against Activision Blizzard alleging that the division led by Brack has a "pervasive frat boy workplace culture," in which women are subject to workplace harassment and paid less than men.
According to the suit, Brack and other company executives were aware of these issues but "failed to take effective remedial measures in response to these complaints."
Now what
As if that weren't bad enough, last week some 1,500 Blizzard employees staged a walkout to protest the same issues raised by the lawsuit.
Fighting a two-front war against both the state and its own employees apparently didn't appeal to Activision Blizzard, and so today, the company moved to end the crisis by replacing Brack. Investors don't seem pleased by this development, but honestly, given how quickly the crisis was spiraling, I don't believe Activision Blizzard had much choice. In fact, management's decisive move may turn out to be the best thing for the company in the long run.
