Microsoft is Cutting 1900 jobs from its workforce at Activision Blizzard and Xbox
Microsoft is undertaking a significant workforce reduction, affecting approximately 1,900 employees across Activision Blizzard and Xbox. The layoffs predominantly target roles at Activision Blizzard, but some employees from Xbox and ZeniMax will also be impacted.
Key Points:
- Percentage of Workforce: The layoffs constitute around 8% of the overall Microsoft Gaming division, totaling approximately 22,000 employees.
- Internal Memo Confirmation: An internal memo from Microsoft Gaming CEO Phil Spencer confirms the layoffs, citing the need for a sustainable cost structure aligned with the joint strategy of Microsoft Gaming and Activision Blizzard.
- Leadership Commitment: The memo emphasizes the commitment of the Gaming Leadership Team to navigate the process thoughtfully, acknowledging the contributions of the affected employees and offering full support during the transition, including severance benefits.
- Blizzard President’s Departure: Blizzard president Mike Ybarra has decided to leave the company after overseeing the acquisition. A new Blizzard president will be named by Microsoft next week. Allen Adham, Blizzard’s Chief Design Officer, is also leaving, with plans to mentor young designers in the industry.
- Project Cancellation: Blizzard’s previously announced survival game is canceled as part of the changes. Some team members will be reassigned to promising new projects in the early stages of development.
- Context of Industry Trends: The layoffs align with a trend in the gaming industry, with several other companies like Riot Games, Google, Discord, Twitch, Unity, eBay, and others announcing cuts in the same month.
- Acquisition Background: Microsoft completed its $68.7 billion acquisition of Activision Blizzard in October, following regulatory battles. Former Activision Blizzard CEO Bobby Kotick stepped down in December, with Microsoft restructuring leadership under Matt Booty.
- Previous Layoffs: Microsoft’s last significant round of layoffs occurred a year ago, affecting 10,000 employees.
- Earnings Report: Microsoft is set to report its fiscal Q2 2024 earnings next week, which will include results from the impact of the Activision Blizzard acquisition.
- Leadership Changes: Earlier leadership changes saw Sarah Bond promoted to Xbox president, and Matt Booty elevated to president of game content and studios, overseeing Bethesda, ZeniMax studios, and Activision Blizzard
The layoffs account for approximately 8 percent of the overall Microsoft Gaming division, which comprises around 22,000 employees. Microsoft Gaming CEO Phil Spencer, in an internal memo obtained by The Verge, confirmed the layoffs. The memo details the commitment of Microsoft Gaming and Activision Blizzard leadership to establish a strategy and execution plan with a sustainable cost structure supporting the entire growing business. The decision to reduce the gaming workforce by around 1,900 roles out of 22,000 is described as a painful but necessary step. The affected employees, who played vital roles in the success of Activision Blizzard, ZeniMax, and Xbox, will receive support during the transition, including severance benefits based on local employment laws.
In addition to the layoffs, Blizzard president Mike Ybarra has chosen to leave the company after overseeing the acquisition. Matt Booty, Microsoft’s game content and studios president, announced Ybarra’s departure in an internal memo, and Microsoft plans to name a new Blizzard president next week. Another departure is Allen Adham, Blizzard’s chief design officer and co-founder, whose influence on Blizzard’s games will be remembered for years. Microsoft intends to cancel Blizzard’s previously announced survival game but shift some of the affected workforce to promising new projects in the early stages of development.
These layoffs align with recent workforce reductions at Riot Games, Google, Discord, Twitch, Unity, eBay, and other companies. Microsoft’s acquisition of Activision Blizzard, completed in October for $68.7 billion, has led to these restructuring efforts. The absence of a direct replacement for former Activision Blizzard CEO Bobby Kotick has resulted in a suite of Activision Blizzard executives reporting to Matt Booty.
Notably, this comes a few months after significant leadership changes at Xbox, with Sarah Bond promoted to Xbox president and Booty elevated to president of game content and studios, overseeing Bethesda, ZeniMax studios, and Activision Blizzard. Microsoft last announced major layoffs a year ago, affecting 10,000 employees. The company is set to report its fiscal Q2 2024 earnings, including results from the impact of the Activision Blizzard acquisition, next week.