Activision Blizzard is set to report earnings for the all-important holiday quarter tomorrow, Tuesday February 12, and things aren't looking good at this stage. The company's share price dropped by as much as six percent on Monday, and that's notable for at least a couple of reasons.

　　First, Monday was the first full day of stock trading following the reports of "hundreds" of layoffs hitting the company this week. Second, The Los Angeles Times reports that analysts are expecting Activision Blizzard's sales to fall by two percent to $7.28 billion when the company reports earnings on Tuesday. Investors want to see positive growth trajectories, and the prediction of a downturn may have spooked them.

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　　Regarding the rumoured layoffs, Business Insider reported that the cutbacks are "part of restructuring aimed at centralizing functions and boosting profit." Activision Blizzard reportedly employed around 9,800 people at the end of 2017.

　　Jason Schreier of Kotaku said he spoke to people close to Activision Blizzard on Monday, and they told him that they are still in the dark about potential upcoming layoffs. Schreier also reported that the rumored Activision Blizzard layoffs may primarily affect people in non-development roles, including marketing and sales. One team that could be affected is Activision's Destiny division. Given that Activision and Bungie split up, the internal team at Activision dedicated to Destiny could be hit. Sources told Kotaku that some former Destiny team members at Activision could move into positions at other Activision teams, but the opportunities are described as "limited."

　　Activision has also seen a handful of executives and higher-ups leave in recent months. In 2018, Activision Publishing CEO Eric Hirshberg left, as did Blizzard founder and CEO Mike Morhaime. Additionally, Activision fired CFO Spencer Neumann on New Year's Eve; he joined Netflix in the same role. Blizzard's CFO, Amrita Ahuja, left the company in January to join Square. Activision's consumer products division boss, Tim Kilpin, left the company this month. Additionally, Activision higher-ups Michael Condrey and Glen Schofield, who founded Call of Duty: WWII studio Sledgehammer, left the company last year. Condrey is now launching a new 2K studio in Silicon Valley.

　　It's been tough sledding across the video game industry of late, as Electronic Arts recently reported it had a difficult quarter after Battlefield V failed to sell up to expectations. Additionally, Take-Two's share price slid last week after the company offered guidance that was many millions below what analysts were expecting in terms of profit.

　　GameSpot will have all the important details from Activision Blizzard's earnings report tomorrow, so keep checking back for more.