Microsoft has confirmed that 1,900 employees out of the 22,000 workers in the company’s gaming division, primarily from the Activision Blizzard, Zenimax and Xbox teams, will be laid off as part of internal restructures following the formal acquisition of Activision Blizzard by Microsoft late last year. Following the confirmation of the layoffs, Mike Ybarra, President of Blizzard, has also announced his resignation. These workforce cuts comes as Microsoft reports a $3 trillion market capitalisation following recent profitable investments in AI, making it the second company ever to reach this milestone following Apple.
The announcement of the staff job cuts comes courtesy of an internal memo from Microsoft Gaming CEO Phil Spencer published by The Verge. The memo declares “an execution plan with a sustainable cost structure” formed following the Activision Blizzard merger, which includes “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 memo promises “full support to those who are impacted during the transition, including severance benefits informed by local employment laws.”
In addition to these layoffs, President of Blizzard, Mike Ybarra, announced his resignation from his role on social media. “I want to thank everyone who is impacted today for their meaningful contributions to their teams, to Blizzard, and to players’ lives,” he posted on Twitter/X adding “I also want to let you all know today is my last day at Blizzard.”
I want to thank everyone who is impacted today for their meaningful contributions to their teams, to Blizzard, and to players’ lives. It’s an incredibly hard day and my energy and support will be focused on all those amazing individuals impacted – this is in no way a reflection…
— Mike Ybarra 🎄 (@Qwik) January 25, 2024
Despite the Microsoft organisation overall announcing a nearly unprecedented $3 trillion market cap, the company’s internal gaming division has faced many challenges in recent months, even factoring in its recent massive acquisitions. Microsoft’s major exclusive titles, such as Redfall and Starfield, have generally failed to make as much of an impact with critics or players as the company would prefer. Overwatch 2, Blizzard’s free-to-play hero shooter, has suffered from a negative reception from fans following broken promises regarding PvE content. Even Activision’s most recent Call of Duty release has been a critical and financial disappointment from a franchise which has historically outsold anything released the same year not developed by Rockstar Games.
This is coupled with wave after wave of layoffs and studio closures which have rocked the gaming industry, and the tech industry in general, in recent months due to unsuccessful products and unsustainable levels of over-hiring during lockdown. Riot Games and People Can Fly are two gaming companies which have reported substantial layoffs in the last few days alone. As such, with so many tech and gaming companies cutting back, it can be challenging for those facing layoffs to find new positions. Hopefully for those impacted by Microsoft’s recent staff cuts will be able to land on their feet and find new roles before long.