Microsoft is Laying Off 1,900 Employees at Activision Blizzard, Zenimax, and Xbox

Microsoft is laying off 1,900 employees at Xbox, Activision Blizzard, and Zenimax. Activision Blizzard, which Microsoft purchased for $68 billion in October, is being hit the hardest by the job cuts, which represent approximately 8% of the 22,000 employees working at the Microsoft Gaming division.

In an internal memo obtained by The Verge, Phil Spencer, CEO of Microsoft Gaming, explained that the company had to make the “painful decision” to reduce its gaming workforce to reach a “sustainable cost structure that will support the whole of our growing business.”

Blizzard president and former Xbox exec Mike Ybarra also announced today that he’s leaving the company, and so is Allen Adham, Blizzard’s chief design officer and the company’s founder. “Having already spent 20+ years at Microsoft and with the acquisition of Activision Blizzard behind us, it’s time for me to (once again) become Blizzard’s biggest fan from the outside,” Ybarra posted on X today.

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

You can read Phil Spencer’s full memo below:

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.

As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1900 roles out of the 22,000 people on our team. The Gaming Leadership Team and I are committed to navigating this process as thoughtfully as possible. The people who are directly impacted by these reductions have all played an important part in the success of Activision Blizzard, ZeniMax and the Xbox teams, and they should be proud of everything they’ve accomplished here. We are grateful for all of the creativity, passion and dedication they have brought to our games, our players and our colleagues. We will provide our full support to those who are impacted during the transition, including severance benefits informed by local employment laws. Those whose roles will be impacted will be notified, and we ask that you please treat your departing colleagues with the respect and compassion that is consistent with our values.

Looking ahead, we’ll continue to invest in areas that will grow our business and support our strategy of bringing more games to more players around the world. Although this is a difficult moment for our team, I’m as confident as ever in your ability to create and nurture the games, stories and worlds that bring players together.

Phil

Matt Booty, the new Head of Xbox Game Studios at Microsoft also shared more details about Microsoft’s strategy in a separate memo obtained by The Verge. Microsoft is planning to appoint a new Blizzard president next week, and a new survival game that Blizzard had previously announced has now been canceled. As a result, Booty said that Microsoft will be “shifting some of the people working on it to one of several promising new projects Blizzard has in the early stages of development.”

Activision Blizzard was the biggest acquisition in Microsoft’s history, and it had to be expected that the software giant would need to streamline its gaming division at some point. Unfortunately, many other companies in the video games industry also recently announced layoffs including Twitch, Unity, Discord, and Riot Games. Even though many other tech companies including Google and Amazon also had to reduce their workforce in recent months, the job cuts at Microsoft Gaming come just a day after the company’s market capitalization hit $3 trillion for the first time.