Three months on from the acquisition of Activision Blizzard, Microsoft has announced major layoffs impacting 1,900 workers of the Microsoft Gaming division. Per reporting from The Verge, the cuts will affect 8% of all Microsoft Gaming employees, with those under the Activision Blizzard, Xbox and ZeniMax banners most impacted.
The move was reportedly made to ensure a “sustainable cost structure” for the company and reduce “areas of overlap” that may impact the company’s growth going forward.
“It’s been a little over three months since the Activision, Blizzard, and King teams joined Microsoft. As we move forward in 2024, the leadership of Microsoft Gaming and Activision Blizzard is committed to aligning on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business,” Microsoft Gaming CEO Phil Spencer reportedly said of the layoffs, in an internal memo shared by The Verge.
Read: Twitch is laying off 500 employees, around 35% of staff
“Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth. As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1900 roles out of the 22,000 people on our team.”
“The people who are directly impacted by these reductions have all played an important part in the success of Activision Blizzard, ZeniMax and the Xbox teams, and they should be proud of everything they’ve accomplished here. We are grateful for all of the creativity, passion and dedication they have brought to our games, our players and our colleagues.”
Spencer has reportedly committed to supporting those impacted by the transition, and promised to continue investing in the growth of Microsoft going forward, while also “bringing more games to more players around the world.”
For now, however, the layoffs have had the opposite impact, as Blizzard has been forced to cancel one of its long-gestating games seemingly as part of the cost-cutting measures. Not much is known about the game – only that it had been in development for several years, and was a survival-themed project – but work has now ended, with some developers cut, and others set to be reassigned.
In addition, Blizzard president Mike Ybarra has chosen to leave Microsoft. In a memo from Microsoft’s Game Content and Studios President, Matt Booty, this was implied to be a natural decision as Ybarra had “seen the [Activision Blizzard] acquisition through” and was now ready to depart the company.
Allen Adham, Blizzard Chief Design Officer, will also leave the company as part of these changes.
With these decisions, Microsoft becomes just the latest company to initiate sweeping layoffs to kick off 2024. Already, we’ve seen companies including Twitch, Discord, Riot Games and more initiate cuts, putting thousands of games industry employees out of work.
