Microsoft’s Gaming Division Initiates Layoffs, Cutting 1,900 Jobs Post-Merger
In the aftermath of Microsoft’s monumental $69 billion merger deal with Activision-Blizzard, the tech giant’s gaming division is set to lay off nearly 2,000 employees, according to a memo from Xbox chief Phil Spencer.
The memo, verified by Microsoft, outlines the company’s intention to reduce its workforce by 1,900 out of the current 22,000 staff members.
The announcement comes three months after Microsoft’s acquisition of Activision-Blizzard, renowned for popular franchises such as Call of Duty and Warcraft.
In the memo, Spencer characterizes the decision to cut staff as a “painful decision.” The layoffs are expected to impact employees within the Xbox division and at publisher Zenimax, which oversees studios including Bethesda and Arkane.
Microsoft has not provided specific details regarding the distribution of layoffs across its various business units, as requested by BBC Newsbeat.
A subsequent letter, also verified by Microsoft and addressed to Blizzard staff from Microsoft Studios head Matt Booty, confirmed that meetings with affected personnel would take place throughout the day. Booty assured full support, including severance benefits aligned with local employment laws.
The communication additionally disclosed the discontinuation of development on a survival game project widely known as Odyssey.
Microsoft’s acquisition of Activision-Blizzard and Candy Crush creator King was finalized in September, following regulatory challenges.
The aftermath saw the departure of Activision CEO Bobby Kotick, and now, Blizzard boss Mike Ybarra has announced his departure, expressing gratitude for leading the company through a remarkable period.
The gaming industry has witnessed a series of layoffs in recent times, with Riot Games, maker of League of Legends, announcing an 11% reduction in its global workforce this week.
This follows layoffs at Unity, Twitch, and various smaller studios in 2023. Experts attribute these industry-wide job cuts to factors such as the cost-of-living crisis and a contraction after the gaming boom during the Covid-19 pandemic.
The tech sector at large has also seen significant workforce reductions, with Microsoft itself announcing 10,000 job cuts across the company last January. The BBC has sought further comment from Microsoft regarding the gaming division layoffs.
