Gaming Industry Layoffs Continue with Microsoft Cutting 1,900 Employees

In a significant reshuffle within the gaming industry, Microsoft has announced substantial job cuts in its gaming division, affecting a portion of its workforce across Activision Blizzard and Xbox teams, just months after the acquisition of Activision Blizzard. This move is seen as an integration strategy to streamline operations within Microsoft Gaming, impacting nearly 9% of its gaming staff, or approximately 1,900 employees out of a total of 22,000.

Phil Spencer, the CEO of Microsoft Gaming, communicated these changes through a staff memo, emphasizing the necessity of this decision in the wake of merging Activision Blizzard into Microsoft's broader gaming framework. This adjustment reflects a strategic realignment and optimization effort within Microsoft's gaming operations, amounting to less than 1% of Microsoft's overall employee base.

The restructuring also sees the departure of Blizzard Entertainment's president, Mike Ybarra, who expressed his solidarity with the impacted employees through a heartfelt message, highlighting the contributions and achievements of the departing staff in the gaming divisions of Activision Blizzard, ZeniMax, and Xbox.

Microsoft's acquisition of Activision Blizzard, finalized in October 2023 for $69 billion, marked a historic transaction in the gaming industry, bringing under its umbrella renowned franchises like Call of Duty, World of Warcraft, and Diablo. This merger aimed to enhance Microsoft's gaming portfolio and address regulatory concerns, leading to leadership changes, including Bobby Kotick's resignation as CEO of Activision Blizzard and Matt Booty's appointment to oversee the merged teams.

Despite these layoffs, Microsoft's commitment to growth and innovation within the gaming sector remains steadfast, with plans to expand its reach and bring more games to a global audience. Spencer's message underscores the company's focus on future investments and the continuous development of gaming experiences that connect players worldwide.

The recent layoffs underscore a broader trend in the gaming industry, where job security has become a pressing concern despite the sector's profitability. The Communications Workers of America (CWA) has pointed out the increasing normalization of layoffs, advocating for unionization as a means to establish safeguards and transparency for workers, including those in gaming.