Microsoft lays off 1,900 Staff from its video games workforce – In a recent development within the gaming industry, Microsoft has decided to cut approximately 1,900 positions from its video game division, as confirmed by Xbox head Phil Spencer in a memo obtained by IGN. This decision follows Microsoft’s $69 billion acquisition of Activision Blizzard in 2023, and Spencer emphasised the need for a sustainable cost structure to support the entire business.
Microsoft lays off 1,900 Staff from its video games workforce
The memo expressed the commitment of the leadership at Microsoft Gaming and Activision Blizzard to align on a strategy that focuses on growth opportunities. Spencer acknowledged the painful nature of the decision to reduce the gaming workforce by nearly 9%, with 1,900 roles affected out of the 22,000-person team. The layoffs aim to address areas of overlap and streamline operations.
The company pledges to provide full support to those impacted during the transition, offering severance benefits informed by local employment laws. Spencer urged respect and compassion for departing colleagues consistent with the company’s values. The layoffs are part of a broader trend in the gaming industry, where various companies, including THQ Nordic, Embracer subsidiary Black Forest Games, People Can Fly, and Riot Forge, have recently faced workforce reductions.
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
Blizzard Entertainment President Mike Ybbara and Chief Design Officer Allen Adham are among the notable departures. Ybbara expressed gratitude to those impacted, emphasising that the decision is not a reflection of their contributions. He also announced his departure from Blizzard, becoming a fan from the outside after over 20 years with Microsoft.
In addition to the layoffs, Blizzard’s long-awaited survival game, Odyssey, has been cancelled. The industry-wide trend of layoffs has persisted into 2024, with estimates suggesting over 10,000 workers may have been affected in 2023. A recent GDC survey indicates that one-third of game developers experienced layoffs directly or witnessed them at their companies.
Microsoft, currently valued at over $3 trillion, is the second company ever to break this financial threshold, highlighting the significance of these developments within the gaming giant.