In a recent development, Microsoft has initiated layoffs affecting 1,900 employees within its gaming division, primarily targeting roles at Activision Blizzard. However, some employees from Xbox and ZeniMax will also experience the impact of these cuts.
This decision corresponds to approximately 8 percent of the total Microsoft Gaming division, which consists of around 22,000 employees. An internal memo from Microsoft Gaming CEO Phil Spencer, obtained by The Verge, confirms the details of the layoffs.
The memo highlights the commitment of Microsoft Gaming and Activision Blizzard leadership to aligning on a strategy and execution plan with a sustainable cost structure for the growing business. The painful decision to reduce the gaming workforce by about 1,900 roles reflects the company’s effort to streamline operations and optimize resources.
Microsoft assures full support for the affected employees during the transition, including severance benefits in accordance with local employment laws. The memo emphasizes recognizing the significant contributions of the departing employees and treating them with respect and compassion.
Despite the challenges posed by the layoffs, Microsoft expresses confidence in the team’s ability to continue creating and nurturing games, stories, and worlds that bring players together. The company reaffirms its commitment to investing in areas that promote business growth and further its strategy of bringing more games to players worldwide.
Alongside the layoffs, Blizzard president Mike Ybarra has decided to leave the company after more than 20 years at Microsoft. Microsoft plans to name a new Blizzard president next week, and Blizzard’s Chief Design Officer, Allen Adham, is also departing. The changes include the cancellation of Blizzard’s previously announced survival game, with some of the affected personnel being reassigned to promising new projects in the early stages of development.
These layoffs come amid similar announcements from other major companies in the industry, including Riot Games, Google, Discord, Twitch, Unity, eBay, and others.
Microsoft completed its $68.7 billion acquisition of Activision Blizzard in October, following months of regulatory battles. The layoffs follow Xbox leadership changes, with Sarah Bond promoted to Xbox president and Matt Booty appointed president of game content and studios, overseeing Bethesda, ZeniMax studios, and Activision Blizzard.
The company last announced significant layoffs a year ago, affecting 10,000 employees. Microsoft is set to report its fiscal Q2 2024 earnings next week, incorporating results from the impact of the Activision Blizzard acquisition.
In a memo to Blizzard employees, Matt Booty outlines the company’s focus on products and strategies for future growth, acknowledging the challenging nature of the layoffs and expressing a commitment to support those affected during the transition. He also emphasizes the importance of transparency and care in managing this period of change.
As the gaming industry undergoes these shifts, the blogpost concludes with gratitude for the contributions of the departing employees and a commitment to continue creating exceptional games in a culture that empowers everyone.
