Ubisoft Rehaul and Layoffs Demanded by Minor Stakeholder

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

Ubisoft Minority Investor Demands Company Restructuring

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

Aj Investment, a significant minority shareholder in Ubisoft, has publicly called on the company's Board of Directors, including CEO Yves Guillemot and Tencent, to take drastic action. In an open letter, they expressed deep dissatisfaction with Ubisoft's current performance and strategic direction.

The letter cites the delayed release of key titles like Rainbow Six Siege and The Division to late March 2025, a lowered revenue outlook for Q2 2024, and overall poor performance as major concerns. Aj Investment's concerns extend to the management's long-term viability, proposing a complete change in leadership, 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 public criticism has impacted Ubisoft's share price, which reportedly plummeted more than 50% over the past year, according to the Wall Street Journal. Ubisoft has yet to officially respond to the letter.

Aj Investment directly criticizes Ubisoft's management, stating, "The main reason why the valuation is so low compared to the peers is that Ubisoft at current state is mismanaged and shareholders are hostages of Guillemot family members and Tencent who take advantage of them." They further allege a focus on short-term gains rather than a long-term strategy to deliver exceptional gaming experiences.

Aj Investment's Juraj Krupa specifically highlighted disappointment over the cancellation of The Division Heartland and criticized the underwhelming reception of Skull and Bones and Prince of Persia: The Lost Crown. Krupa also points to underperforming franchises, stating: "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," and criticizes the rushed release of Star Wars Outlaws, despite high anticipation.

Ubisoft's reliance on Star Wars Outlaws to revitalize its performance has reportedly backfired, contributing to a share price decline to its lowest point since 2015—a drop of over 30% year-to-date.

The letter also proposes significant staff reductions. Krupa draws a comparison to competitors like Electronic Arts (EA), Take-Two Interactive, and Activision Blizzard, highlighting their higher revenue and profitability with smaller workforces. Ubisoft's over 17,000 employees contrast sharply with EA's 11,000, Take-Two's 7,500, and Activision Blizzard's 9,500.

Krupa urges Ubisoft to implement "significant cost reductions and staff optimization" to improve operational efficiency, suggesting the sale of studios deemed unnecessary for core IP development. He notes that Ubisoft's 30+ studios constitute an overly large and inefficient structure. While acknowledging previous layoffs (approximately 10% of the workforce), Krupa insists these measures are insufficient, even considering the announced cost-cutting plans of €150 million by 2024 and €200 million by 2025.