Microsoft is making some massive cuts, laying off 1,900 employees at Activision Blizzard, Xbox, and ZeniMax this week. The cuts come as Microsoft begins the work of merging Activision Blizzard into its Microsoft Gaming business after its acquisition of the company cleared federal regulations a few months ago.
The Verge broke the story of nearly 8% of Microsoft Gaming’s 22,000 staff being let go, sharing an internal memo that Microsoft Gaming CEO Phil Spencer sent out. In it, Spencer says that the reason for the cuts is to streamline the work Microsoft Games does and to remove redundancies.
“It’s been a little over three months since the Activision, Blizzard, and King teams joined Microsoft. As we move forward in 2024, the leadership of Microsoft Gaming and Activision Blizzard is committed to aligning on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business. Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth,” the CEO opened before outlining the layoffs, informing everyone that those leaving would receive severance and describing the cuts as “painful.”
Alongside these layoffs, though reportedly not because of them, Blizzard president Mike Ybarra will be leaving the company as well. In an internal memo from Microsoft’s game content and studios president, Matt Booty, Ybarra was said to be leaving after seeing the buyout through to its end. Ybarra is joined by Blizzard co-founder and chief design officer Allen Adham, who is departing as well.
With all that talent leaving and basically the brains of Blizzard walking out the door, it shouldn’t come as much of a surprise that Blizzard’s in-development survival game has been canceled. We didn’t know much about the project, but some of the team working on it will be moved to other in-development Blizzard projects.
The layoffs come as the tech and entertainment industries are dialing back, but CEO pay is still through the roof, and just today, reports came out that 2023 was a banner year economically. Across gaming and tech, companies like Amazon, Google, Twitch, Paramount, and more are struggling to come back into alignment after COVID highs. In fact, Microsoft itself laid off 10,000 employees last year before making these recent cuts.
