Ubisoft Faces Shareholder Demand for Restructure and Job Cuts

Following a string of underperforming releases and setbacks, Ubisoft faces pressure from a minority investor, Aj Investment, demanding a complete restructuring. The investor's open letter calls for a new management team and significant staff reductions.

Ubisoft's Strategic Shortcomings Under Scrutiny

Aj Investment, a significant minority shareholder, publicly criticized Ubisoft's performance and strategic direction. Key game delays (Rainbow Six Siege and The Division to late March 2025), a lowered Q2 2024 revenue outlook, and overall poor performance fueled concerns about the management's long-term viability and ability to deliver shareholder value. The investor explicitly proposed replacing CEO Yves Guillemot with a new CEO focused on cost optimization and studio restructuring for enhanced agility and competitiveness.

The investor's letter contributed to a decline in Ubisoft's share price, which has reportedly fallen over 50% in the past year, according to the Wall Street Journal. Ubisoft has yet to publicly respond to the letter.

Aj Investment directly attributed the low valuation to mismanagement, suggesting that shareholders are being exploited by the Guillemot family and Tencent. The investor criticized the company's focus on short-term gains rather than a long-term strategy focused on delivering exceptional gaming experiences.

Further criticisms included the cancellation of The Division Heartland, the underwhelming reception of Skull and Bones and Prince of Persia: The Lost Crown, and the perceived rushed release of Star Wars Outlaws, despite high expectations. While acknowledging the success of Rainbow Six Siege, the investor highlighted the stagnation of other popular franchises like Rayman, Splinter Cell, For Honor, and Watch Dogs.

Aj Investment's Juraj Krupa advocated for substantial staff reductions, citing the higher revenue and profitability of competitors like Electronic Arts, Take-Two Interactive, and Activision Blizzard, despite employing significantly fewer staff. Ubisoft's workforce of over 17,000 is contrasted with EA's 11,000, Take-Two's 7,500, and Activision Blizzard's 9,500.

Krupa urged for aggressive cost-cutting measures and staff optimization to improve operational efficiency. He also suggested selling underperforming studios to streamline the company's structure, noting that Ubisoft's network of over 30 studios is excessively large for its current profitability. While acknowledging previous layoffs (approximately 10% of the workforce), Krupa emphasized that these measures were insufficient to ensure long-term competitiveness. The announced cost-cutting targets of €150 million by 2024 and €200 million by 2025 were deemed inadequate.