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Activision Blizzard faces discrimination lawsuit amidst push for unions

Workplace discrimination has long been an issue in the American tech sector and is arguably at its worst among game developers, where only 24% of the workforce is made up of women despite the consumer base being much closer to an even gender split.[1] That could change after Activision Blizzard, one of the largest video game developers in the United States known for games like Call of Duty and World of Warcraft was hit with a lawsuit by the state of California in late July for workplace discrimination and sexual harassment.[2] While this is not the first time a suit like this has happened, this one could uniquely impact the tech sector as a whole.

Background

It’s hard to understate how important Activision Blizzard is in the industry. Not only is it a Fortune 500 company[3], but it is also the current market leader in American video games.[4] It has a large influence on other game developers as well as the rest of the tech sector. While the company isn’t new to controversy the details of this lawsuit have been unusually public. Fans and employees took to social media to speak out against the company, and many employees participated in a heavily publicized walkout on July 28th. There the employees demanded the end of forced arbitration in contracts and public compensation data from the corporation, as well as changes to the hiring process and general workplace culture.[5] The publicity of these events has made it difficult for Activision Blizzard to move past them without making large changes. The actions they take could spread through the industry.

Possible Change

One of the largest potential changes that could occur is a large increase in unionization. While unionization in American is generally low across the board, the tech sector is especially low. It currently has no industry wide unions whatsoever.[6] Game development is not the only part of the tech sector where unions have been front and center recently either. The New York Times tech staff has been front and center as their attempts at unionization have caused conflict with the larger company.[7] If events like these spur the creation of an industry wide union it could have large implications on tech startups who have long operated without unions having a prevalent role.

An important implication for tech startups is a potential increase in the employment of women in the industry. This could result in more women owned tech startups to rise up. Currently, only around 1 in 4 tech startups have at least one founding woman. Holding companies accountable for workplace discrimination could increase the number of women joining the industry. Even prior to this suit it was already increasing yearly.[8] Data also suggests that these startups find it more difficult to secure funding than their male only counterparts, something that would hopefully be less common as women become more common in the industry.[9]

Takeaways

The most important takeaway from this lawsuit is that, while the allegations detailed in it are awful, the exposure of this information could lead to an industry that is safer and more receptive to women and other minority groups by holding employers more accountable for workplace discrimination. Changes like these could make the industry a more enticing landing spot for women entering the work force going forward. This might provide tech startups with a larger pool of qualified candidates for positions. However it might increase the amount of competition for those startups as women become more likely to start businesses themselves.


[1] https://www.cnbc.com/2020/08/14/video-game-industry-grapples-with-murky-track-record-on-diversity.html

[2] https://www.nytimes.com/2021/07/21/business/activision-blizzard-california-lawsuit.html

[3] https://fortune.com/company/activision-blizzard/fortune500/

[4] https://companiesmarketcap.com/activision-blizzard/marketcap/

[5] https://www.cnn.com/2021/07/28/tech/activision-blizzard-bobby-kotick-walkout/index.html

[6] https://www.bls.gov/news.release/union2.nr0.htm

[7] https://www.bloomberg.com/news/articles/2021-08-10/new-york-times-tech-staff-to-walk-out-escalating-union-fight

[8] https://www.svb.com/women-in-technology

[9] https://www.cio.com/article/3516012/women-in-tech-statistics-the-hard-truths-of-an-uphill-battle.html

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