Microsoft Executes Strategic Workforce Adjustments: 1,900 Layoffs Across Activision Blizzard, Xbox, and ZeniMax Following $68.7 Billion Acquisition
Microsoft has initiated significant layoffs, affecting around 1,900 employees across Activision Blizzard, Xbox, and ZeniMax, following the completion of the $68.7 billion acquisition of Activision Blizzard in October 2023. The job cuts account for approximately 8% of the total Microsoft Gaming division workforce, which consists of around 22,000 employees. The Verge reported that Activision Blizzard is bearing the majority of the layoffs, and Blizzard President Mike Ybarra and Chief Design Officer Allen Adham have decided to leave the company.
In an internal memo from Microsoft Gaming CEO Phil Spencer, it was stated that the layoffs are part of a strategy to align resources and talent with Microsoft Gaming’s top priorities, emphasizing sustainable growth and delivering ambitious games across diverse platforms. The memo assures that affected employees will be notified directly and provided with severance benefits adhering to local employment laws.
The broader gaming industry has witnessed a wave of layoffs in various studios, including Amazon Games, Ubisoft, and Intel, despite record revenues in the gaming hardware sector. The layoffs are often attributed to unsustainable growth models, overhiring during the COVID-19 pandemic, and the increasing use of generative AI tools in game development.
The memo also mentions the cancellation of Blizzard’s survival game project, with resources being redirected to other promising projects in early development. Microsoft plans to announce a new Blizzard President soon. The company reiterates its commitment to supporting the impacted employees during the transition period and maintaining transparency throughout the process.