I assume that stock was in the form of restricted stock units that vest over the course of a few years. I’ve seen this kind of thing play out at a few big tech companies over the years and have seen people lose literally hundreds of thousands of dollars in delayed payout.
They offer these as a “loyalty incentive” so the employee wants to stay while of course offering no loyalty in return when they decide to execute layoffs.
Plays out in small tech companies too, albeit in a slightly different way.
Got that carrot dangled in front of me at a past job. Company was past start-up phase; self-supporting and doing ok, but not outrageously well. Promises of riches should the company be “noticed” and bought for an outrageous amount.
Of course none of that accounted for the CEO (founder and 85% shareholder) being an absolute crazy person, who would change the development roadmap into making a vastly different product than the one we (the techies) believed in, TURN DOWN THE OUTRAGEOUS SUM BECAUSE HE THOUGHT HE COULD GET A BETTER OFFER, basically run the company into the ground, and wind up selling it for a pittance (which would have made the employees’ share a pittance of a pittance).
I mean most of us had already left by that point, but finding out around 4 years after that he’d turned down about $150M and wound up selling out for $3M, that stung a little.
Reminds me of a place I worked for in the 90s. We were the premiere catalog of contemporary radio drama in the country. It was niche, but doing okay. One day, this company comes up to us and says that they’re starting a satellite radio network and if we work on a commission basis, the company will make a lot of money. Only about five people worked there and we all begged and pleaded with the owner to take the offer, but he was nuts and kept saying things like, “there’s GOT to be a catch!” So he ended up passing.
Yes, that was Sirius, which became XM.
Fucking moron.
Hey, I worked there!
Sounds familiar to me too.
Sounds like just another way to avoid paying people. A share that’s never paid out might as well just be Monopoly money.
One of the worst instances was one year that virtually all “merit increases” were instead replaced with RSUs that vested in a year. When I had to bring that to my team and tell them what they were getting… Well, not a single one of us expected to see that money. Sure enough, layoffs happened and that potential money evaporated before any of us saw a cent. None of us were unprepared or surprised, but obviously still unhappy.
Except these were never meant to be paid out. Bungee isn’t about to give away their company to their employees.
It’s a plastic carrot.
Yes, I am certain that was the case. It was the case in my examples too… Every now and then someone gets through and gets a couple units to vest, but the majority are gone and so is that compensation. It’s disgusting.
I assume they have to cash in some. Or else the SEC comes sniffing around like “you guys have given out 3 million shares over ten years but no one has ever cashed a singled one out, hmmmmm”. So those are likely the rare few. And a few units tracks because they aren’t giving $2m in stock to some entry level tech.
I always liken those practices to the same shit they flash musicians or sports figures during negotiations. Wave a mansion, Lambo, gold, some ladies making all kinds of promised. But in the end, some contractual loop hole says that you’re just “borrowing” it all. Fake money.
RSUs can be a great bonus, but agreed, you definitely shouldn’t consider RSUs part of your total compensation unless they vest quarterly to yearly. If they take a full four years to start vesting you definitely shouldn’t count on that income.
Tassi’s a pretty well-respected and reliable journalist. I would trust his info. And Destiny is one of the games he consistently covers. We know from prior stories he has sources inside Bungie. Using present tense in the hope they weren’t all laid off.
Leaving people with healthcare for a singular day is just evil
It’s a dick move for sure, but the clawback of unvested shares is vicious. Not possible to know the total worth without being privy to the employment contracts of those let go, but for a single senior employee of long tenure it might constitute a 6- or 7-figure rip-off. Depending on the number of staff let go, the amount of options each held and what their strike prices were, this layoff could potentially constitute a clawback of options that would have been worth tens or even hundreds of millions of dollars of Sony shares.
The clawback in general isn’t really an issue; that’s how restricted stock grants work. You forfeit anything that hasn’t vested when you leave the company, no matter whose idea that is.
The problem is that it was Sony stock, and it’s going back to Bungie. The stock should revert to Sony. In fact, I don’t think it can be any other way, as those boilerplate details would have been included in the contract details of the initial stock grant. This makes me doubt the veracity of the unnamed source.
“Though not health insurance”
Healthcare wasn’t affected, thankfully.
Plus, COBRA would come into play also. I’ve been in a similar situation and health insurance is luckily one of the least scary parts.
Cobra might as well not even exist for most people.
The two layoffs I’ve been through, Cobra was offered as an option and in both cases it was wildly unaffordable. Like…I couldn’t have afforded it even if I still had the job I had just lost, let alone while unemployed.
In both cases I just basically only had the option to cross my fingers and hope I didn’t need healthcare while letting it lapse completely until I found a new job. Thankfully in the first case I was only unemployed about 3 weeks, but the other time, it was about 6 months.
What eventually came through for me was my state’s version of Medicaid in that situation. Basically it was only available to people earning less than XYZ, but any funds you received as aid from the state didn’t count toward that, meaning that unemployment was exempt and as such, my income was zero. Of course there was like an 8 week waiting period and then it took several more weeks for all the paperwork to go through, but eventually it did kick in.
I’m so glad bungo left that hellish Microsoft contract so they could be an awesome indie studio again and put out classic for-gamer games!!!
We are going to be seeing a lot of this over the next few years. And it is mostly the same as “EA bought and killed all these studios” back in the day.
The live game market is more and more crowded every year and Destiny 2 is winding up the same arc it has been in since Destiny 1 (I think?). It is hard to tell what the reality of “45% below the full-year outlook” means, but player retention HAS been falling and that is a good indicator.
If Bungie had stayed independent or stayed at MS they would likely be in the same place. Well, at MS they would have gotten gutted with 343 last year.
Its similar to HBS getting gutted under Paradox. I still think it is bullshit that, of all studios, HBS was not given the chance to “fix” Lamplighters considering their amazing track record in that genre. But also? I don’t know a single person who was excited for Lamplighters League. We all heard “Harebrained Schemes is making a new game” and immediately got our hopes up for something like Shadowrun or Battletech. And then we got LPL which… is fine. But, regardless of whether they were at Paradox or independent, that would have likely led to massive layoffs because of the flop.
And we are going to see a lot more of this, same as we did in the 90s and 00s. Between economic uncertainty, increasing interest rates, and just general “flops”. Because EVERYONE thinks “extraction shooters” are the next big thing. But… we are increasingly seeing questions of whether Tarkov is even particularly successful. Same with lots of other games. And publishers are less likely to say “Well, you’ll get it right next time. here is another couple million bucks” in the current climate.
Cue: “mysterious fires at Sony HQ, responders say likely many simultaneously acts of arson”
Fired bungie employees: “oh no! anyway”
God, if only
What a dick move, especially the second one. Really goes to show that management seems to forget they’re dealing with actual humans and not machines being turned off at an assembly line. So dehumanizing.
Yet another reason the entire sector should be unionized.
Yeesh. More like bung_hole_, amirite?
Per “a source” lol
Paul Tassi is a legit journalist. Dude’s been covering games on Forbes for over a decade.
Doesn’t make “per a source” any less stupid of a phrase. Every thing is per a source. It only matters if the source is reliable. If you think any source of Paul’s is a reliable one, why bother stating “per a source”?
Any journalist with credibility vets their sources. “Per a source” is pretty much shorthand for “Someone who we have verified works at Bungie and we believe is in a reasonable position to know this information” so even if it turns out to be false its very hard to sue because they printed what they beleived to be true at the time and did basic due diligence to check it wasnt made up bullshit. Otherwise they use much more evasive and broad language.
Forbes is my favourite console.
