Today’s case study comes from Blizzard Entertainment, the video game developer/publisher behind blockbuster titles such as Overwatch, Warcraft, Starcraft, and Hearthstone.
Yesterday, Bloomberg reported that Blizzard employees began circulating a spreadsheet on Friday to anonymously share salaries and recent pay increases after the company’s placation attempt failed.
One employee then created a spreadsheet and encouraged staff to share their compensation information. The anonymous document, reviewed by Bloomberg News, contains dozens of purported Blizzard salaries and pay bumps. Most of the raises are below 10%, significantly less than Blizzard employees said they expected following the study.
Employers like Blizzard extensively research compensation markets to ensure that they pay their employees “competitively” (read: as little as possible without causing unacceptable staffing issues).
By comparing notes with coworkers, Blizzard employees gained valuable knowledge about how their compensation stacks up within the company. Know your value.
Kudos to that enterprising employee.
A pro-labor group recently slammed Activision Blizzard for the pay of Chief Executive Officer Bobby Kotick. His 2019 compensation was worth $40 million at the end of that year, according to data compiled by Bloomberg, and the package has grown since then as the company’s stock has soared. Last year, the company also paid $15 million in stock awards and sign-on bonus to incoming Chief Financial Officer Dennis Durkin.
You know who’s intimately aware of their market value? Mr. Kotick and Mr. Durkin.
In internal messages reviewed by Bloomberg News, Blizzard employees said they were struggling to make ends meet while watching Activision Blizzard revenue grow year after year.
Like it or not, this means that the CEO is doing a good job.
Some producers and engineers at Blizzard can make well over $100,000 a year, but others, such as video game testers and customer-service representatives, are often paid minimum wage or close to it.
Producers and engineers are objectively worth more money on the employment market than game testers and CSRs. Supply and demand.
Last year, the company eliminated hundreds of jobs and asked some of the remaining staff to take on the responsibilities of those who were let go. That extra work did not come with more pay…
One employee wrote that they had to skip meals to pay rent and that they used the company’s free coffee as an appetite suppressant. Another said they would only eat oatmeal and bail on team lunches because they couldn’t afford to buy food at the company cafeteria. A third said they and their partner stopped talking about having kids because they knew they wouldn’t be able to afford it.
This is awful and I have the deepest sympathies for the poorly-compensated employees. That said, publicly traded companies are in the business of paying you as little as they can get away with. They are not in the business of making sure you can afford rent or have kids. As the kids say, that’s a “you” problem.
How do you solve that problem? If you’re a game tester, you can learn the necessary skills to become a software engineer. You can unionize, like beleaguered journalists did in our last case study. You can (and should) leave for better pastures:
Several former Blizzard employees said they only received significant pay increases after leaving for other companies, such as nearby rival Riot Games Inc. in Los Angeles.
Or you could leave the video game industry altogether. Any “cool” industry like video game development will attract passionate people willing to work for peanuts. This goes double for cool companies within those industries, like Blizzard or Disney. Even Goldman Sachs was known for paying less than JPM back in the day because people wanted to have GS on their resume.
Don’t compete with people willing to work for peanuts, unless you’re willing to subsist on them.
“Don’t compete with people willing to work for peanuts, unless you’re willing to subsist on them.”
Great quote!