Microsoft is laying off 1,900 employees from Activision Blizzard and Xbox this week. While the primary layoffs are occurring at Activision Blizzard, some employees from Xbox and ZeniMax will also be affected by these reductions.
These layoffs account for approximately 8 percent of the total workforce in the Microsoft Gaming division, which has about 22,000 employees. The Verge has accessed an internal memo from Phil Spencer, the CEO of Microsoft Gaming, confirming the layoffs:
It has been just over three months since the teams from Activision, Blizzard, and King joined Microsoft. As we progress into 2024, the leadership at Microsoft Gaming and Activision Blizzard is dedicated to aligning a strategy and an execution plan with a cost structure that is sustainable and will support our growing business. Together, we have set priorities, pinpointed areas of overlap, and ensured alignment on the best opportunities for growth.
In this process, we have made the difficult decision to reduce our gaming workforce by about 1,900 positions out of the 22,000 people on our team. The Gaming Leadership Team and I are committed to navigating this process as thoughtfully as possible. Those directly impacted by these reductions have all played crucial roles in the success of Activision Blizzard, ZeniMax, and the Xbox teams, and they should be proud of their achievements here. We are thankful for their creativity, passion, and dedication to our games, players, and colleagues. We will provide our full support to those affected during this transition, including severance benefits in accordance with local employment laws. Those whose positions will be impacted will be notified, and we ask that you treat your departing colleagues with the respect and compassion that aligns with our values.
Moving forward, we will continue to invest in areas that will expand our business and support our strategy to bring more games to more players worldwide. While this is a challenging time for our team, I remain as confident as ever in your abilities to create and nurture the games, stories, and worlds that connect players.
-Phil
Alongside these layoffs, Blizzard President Mike Ybarra has chosen to depart from the company. “As many of you know, Mike had been with Microsoft for over 20 years. Having seen through the acquisition as Blizzard’s president, he has decided to exit the company,” stated Matt Booty, President of Microsoft’s game content and studios, in an internal memo.
Microsoft is set to announce a new president for Blizzard next week. Additionally, Allen Adham, Blizzard’s Chief Design Officer, is leaving the company. “As a co-founder of Blizzard, Allen has significantly influenced all of Blizzard’s games. His impact will continue to be felt for many years, both directly and indirectly, as he plans to mentor young designers throughout the industry,” Booty remarked.
The previously announced survival game from Blizzard has been canceled as part of these organizational changes. Booty mentioned that Microsoft would “transition some of the individuals working on it to one of several exciting new projects that Blizzard has in the early stages of development.”
These layoffs coincide with the month when Riot Games, Google, Discord, Twitch, Unity, eBay, and others also announced cutbacks.
Microsoft finalized its $68.7 billion acquisition of Activision Blizzard in October after a 20-month-long struggle with regulators in the UK and the US. Former Activision Blizzard CEO Bobby Kotick stepped down at the end of December, with Microsoft not appointing a direct successor. Instead, a group of Activision Blizzard executives now report directly to Matt Booty.
These layoffs follow significant leadership changes at Xbox a few months back, which saw Sarah Bond ascend to the role of Xbox president, overseeing all Xbox platform and hardware initiatives. Booty was promoted to president of game content and studios, which includes oversight of Bethesda, ZeniMax studios, and Activision Blizzard.
Microsoft had previously announced significant layoffs a year ago, impacting 10,000 employees. The tech giant is scheduled to report its fiscal Q2 2024 earnings next week, which will, for the first time, reflect the outcomes from the acquisition of Activision Blizzard.
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