Activision Blizzard on Tuesday said it was laying off about 50 people across various divisions dealing predominantly with live events and esports as part of a restructuring. The company cites the COVID-19 pandemic’s effects on both the viability of live productions for its esports leagues and the changing viewership habits of its core audience over the past year.

“Players are increasingly choosing to connect with our games digitally and the e-sports team, much like traditional sports, entertainment, and broadcasting industries, has had to adapt its business due to the impact the pandemic has had on live events,” an Activision Blizzard spokesperson told Bloomberg in a statement. According to Bloomberg, laid-off employees will receive three months’ severance and health benefits for the next 12 months. The layoffs also include some employees at Activision-owned mobile firm King, the maker of Candy Crush.

Activision Blizzard operates two massive esports leagues for two of its most popular franchises, Blizzard’s team shooter Overwatch and Activision’s Call of Duty series. Both leagues had global, travel-oriented productions planned for 2020 prior to the pandemic, and both had to shift pretty much every part of the operation to online-only production and remote competition.

“We learned a lot last year in terms of how the leagues can be structured for online play, and we’ll look to carry forward the best practices from that,” Tony Petitti, Activision Blizzard’s president of sports and entertainment, told Sports Business Journal in an interview. “In terms of timing, it’s a reaction to the realities of how the leagues are playing and what resources we need to allocate to best serve the league, owners, teams and fans.” Petitti says the company is nonetheless “really optimistic” that its esports business can grow with a new focus on online production.

While the company’s esports business may have suffered during the pandemic, Activision Blizzard’s core business is doing remarkably well. The company’s latest quarterly earnings report, released last month, indicated record revenues for 2020 that smashed Wall Street expectations, thanks in large part to the ongoing success of Call of Duty and its Warzone battle royale game.

“In a year filled with adversity our extraordinary employees were determined to provide connection and joy to our 400 million players around the world,” Activision Blizzard CEO Bobby Kotick said at the time. “They accomplished this as well as generating record financial results for our shareholders. Under difficult circumstances, but with the same conviction and focus, they will continue to do so in 2021.”

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