This isn't really surprising if you've been watching the company for some time, especially the past year or two. I think all of Blizzard's franchises are in decline with no sign of long-term improvement. Blizzard especially is slow to adapt to the market and just put out anything really. When you cut Blizzard out of the picture, the Activision portfolio is REALLY thin now, maybe half a dozen or fewer IPs that have an impact — really not a place you want to be in if any of those were to fail. They're not that diversified.
And yes, there was probably a fair bit of bloat, but times were good or great before so some extra mouths to feed wasn't a big deal.
Now that times are worse, they're looking to slim down and make cuts. It's really unfortunate that cuts are being made to developers though of course, because it's quite easy to point at massive amounts of mismanagement from executives or upper level management/producers/etc. as responsible, rather than the actions of a individual lower level devs. Most of the issues are at or stem from a macro level (whether design, creative, or business), rather than a pile of smaller issues.
If anything, there should be an audit on management/executives with some heads rolling there, but that's unlikely to happen of course with them having the power.
I won't go over everything they've miscalculated or done poorly as it would take too long to make an itemized list and I'm mostly familiar with Blizzard stuff anyway over the Activision side.
Just some quick ones in terms of Blizzard though:
-Communication to and acting appropriately on (solid) community feedback has been awful, some of the worst in the industry perhaps for years now, and while they sometimes improve momentarily, it has never lasted. The exact reason why is hard to pinpoint, but it probably started to be a lot worse after Greg Street was muffled and eventually left (WoW) + around when vanilla Diablo 3 was having so many issues and never lived up to the game promised/described in development, even after the Reaper of Souls expansion drastically repaired as many things as it realistically could.
-Extremely slow to adapt to industry trends, even if they often set them to some extent with every major release (but that doesn't help when major releases from Blizzard are realistically about a decade or more apart for any given franchise). Someone mentioned in some other thread that Starcraft 2 should have gone free to play maybe 5 years sooner than it eventually did and I can't disagree.
Sinking an ungodly amount of money into eSports (especially OWL now) for games (or the wrong aspects of their games) that aren't particularly well balanced or otherwise suited for high level competition is just a waste if the scene wouldn't have developed to a reasonable level organically.
Letting the Dota concept slip away and HotS more or less failing after being quite late to the party (sunk even further by the wrong development focus later on) is indicative of leadership that isn't forward thinking enough.
Either the people in charge of many decisions now or enough of the company as a whole is woefully out of touch with what the market in general and their customers specifically actually want or would like. Which is crazy when you've got an engaged fan base as large as they do, but they're not using it to their advantage.
It's like the developers at Blizzard hardly play the games they make, or even other games anymore, which is actually anecdotally true in some cases.
They're making games now for some imaginary target demographic with specific metric goals in mind (design by numbers or something) and not actual people anymore. They often fail to understand exactly why some feature was successful or unsuccessful and miss the details for some general fuzzier idea.
I said in another thread before this news came out that for WoW specifically (and other franchises too) they really need to take at least a week or two if not more and just have everyone sit down and play/study earlier iterations of the game to see what was actually successful or not and build on that. There's so many cases with WoW now where there were solutions to problems that worked previously that have been replaced with worse solutions or non-solutions — reinventing the wheel, like nothing existed before the past few years of the game.
Oh and the Diablo Immortal announcement (and subsequent response or lack thereof) fiasco is just another (blatant) indicator of how out of touch Blizzard has gotten, at least in terms of the people with the power to make meaningful decisions.
Anyway that's it for now, probably a bit excessive, but I'd like to see the company succeed after earlier Blizzard releases significantly impacting my childhood and adolescence and it saddens me that a long string of poor decisions is finally collecting its toll on people that probably aren't that responsible for the core issues.