Shares of Activision-Blizzard plunged more than 7% on Tuesday as a growing number of former and current employees signed a petition condemning the video game giant's response to a lawsuit from California's Department of Fair Employment and Housing as "abhorrent and insulting."
The complaint, which was filed last week, alleges Activision paid its female employees less than their male counterparts and provided them with fewer opportunities to advance. It also claims Activision has fostered a "frat boy workplace culture" and ignored complaints by female employees of blatant harassment, discrimination and retaliation.
According to the suit, women make up about 20% of Activision's workforce of approximately 9,500 employees. The company is best known for its work on hit games including Call of Duty and World of Warcraft.
In a lengthy response to the suit shared with FOX Business, Activision called the DFEH's allegations "distorted, and in many cases false, descriptions of Blizzard’s past."
"We have been extremely cooperative with the DFEH throughout their investigation, including providing them with extensive data and ample documentation, but they refused to inform us what issues they perceived. They were required by law to adequately investigate and to have good faith discussions with us to better understand and to resolve any claims or concerns before going to litigation, but they failed to do so," Activision's statement continues. "Instead, they rushed to file an inaccurate complaint, as we will demonstrate in court."
Activision added that it has made "significant changes" to address the company's culture and reflect more diversity within its leadership teams. These measures include "amplified internal programs and channels for employees to report violations", an employee relations team dedicated to investigating employee concerns, and regular anti-harassment and anti-discrimination trainings.
"We are confident in our ability to demonstrate our practices as an equal opportunity employer that fosters a supportive, diverse, and inclusive workplace for our people, and we are committed to continuing this effort in the years to come," Activision's statement concluded. "It is a shame that the DFEH did not want to engage with us on what they thought they were seeing in their investigation."
According to PCGamer, a subsequent email was sent out by Activision Blizzard's Chief Compliance Officer Frances Townsend, who called the lawsuit "truly meritless and irresponsible" and said it included "factually incorrect, old, and out of context stories."
The petition, which has now been signed by over 2,000 former and current employees, according to Kotaku, says the statements by Activision's legal counsel and Townsend have "damaged our ongoing quest for equality inside and outside of our industry."
"Categorizing the claims that have been made as "distorted, and in many cases false" creates a company atmosphere that disbelieves victims. It also casts doubt on our organizations’ ability to hold abusers accountable for their actions and foster a safe environment for victims to come forward in the future. These statements make it clear that our leadership is not putting our values first. Immediate corrections are needed from the highest level of our organization," the petition continues. "Our company executives have claimed that actions will be taken to protect us, but in the face of legal action — and the troubling official responses that followed — we no longer trust that our leaders will place employee safety above their own interests."
The group is demanding that the company issue official statements that "recognize the seriousness of these allegations and demonstrate compassion for victims of harassment and assault" and is calling on Townsend to step down as executive sponsor of the Activision-Blizzard-King Employee Women’s Network for the "damaging nature of her statement." It also calls on Activision executive leadership to work with the group on new efforts to ensure employees have a safe place to speak out and come forward.
"We stand with all our friends, teammates, and colleagues, as well as the members of our dedicated community, who have experienced mistreatment or harassment of any kind," the petition concludes. "We will not be silenced, we will not stand aside, and we will not give up until the company we love is a workplace we can all feel proud to be a part of again. We will be the change."
An Activision spokesperson did not return FOX Business' request for comment on the petition.
In addition to the petition, Kotaku reports that roughly 50 Activision-Blizzard employees are expected to participate in a walkout on Wednesday.
Their demands include an end to mandatory arbitration clauses in all current and future employee contracts, the adoption of recruiting, interviewing, hiring, and promotion policies that improve representation for employees at all levels, publication of data on relative compensation, promotion rates, and salary ranges for all employees, and a third party audit of ABK's reporting structure, HR department, and executive staff.
|ATVI||ACTIVISION BLIZZARD, INC.||79.56||+0.28||+0.35%|
The stock drop puts Activision on pace for the largest percentage decrease since March 16, 2020, when shares fell 10.64%. It also marks the worst two-day stretch since the two-day period ending March 12, 2020, when shares fell 10.13%. Shares are down 12.44% for the month, putting Activision on pace for the worst month since November 2018, when the company's stock fell 27.76%