Microsoft is cutting back on its gaming branch to minimize the overlap between the different studios. 8% of jobs are lost.
1,900 jobs will be lost in Microsoft’s gaming branch. Most jobs will disappear at the recently recruited Activision Blizzard, although jobs will also be lost in the ZeniMax and Xbox departments. Microsoft Gaming employs a total of 22,000 employees – so the round of layoffs affects 8% of employees.
Largest gaming company in the world
Just over three months ago, Microsoft acquired Activision Blizzard. Because of that takeover Microsoft became the second largest gaming company in the world – only China’s Tencent does better. It not only brought in the established names of Blizzard and Activision’s Call of Duty games, but also mobile gaming company King. The layoffs follow in the context of that takeover: the company is looking at which departments overlap with each other and where the priorities should be. That should help level the playing field between Microsoft Gaming and Activision Blizzard.
Phil Spencer, CEO of Microsoft’s gaming business, said the affected employees “have played an important role in the success of Activision, Blizzard, ZeniMax and Xbox.” In a memo obtained by The Verge, the CEO says that affected employees will receive support and a severance package that depends on local labor laws. In the future, the CEO wants to focus mainly on parts of the company that yield something, and thus “bring more games to more players around the world”.
Blizzard president Mike Ybarra is also leaving his post. Microsoft is expected to appoint a replacement next week. Chief design officer Allen Adhem, who co-founded Blizzard, is also leaving the company. He plans to train young game designers. At the end of December, Activision Blizzard CEO Bobby Kotick resigned. No replacement was named for that: Blizzard executives are now reporting to Matt Booty, the new head of game content and studios.
Gamers who were looking forward to the survival game that Blizzard announced will continue to be hungry. The game was canceled so that more resources can go to other projects.
Sector-wide wave of layoffs
Microsoft is far from the only tech company to implement layoffs. Google has cut jobs in several divisions in recent weeks. Many employees also left at Amazon, Meta, Spotify and ByteDance last year.
This sector-wide wave of dismissals is partly a continuation of what we are doing in 2023 saws. During the corona crisis, many companies had the opportunity to hire additional home workers and invested heavily in their technologies. There was also a demand for this at that time, whether it concerns computers, apps or computer games: during the corona pandemic, an extraordinary number of people were glued to the computer, looking for something to do. Revenue from those users has fallen sharply since the end of the pandemic, causing companies to systematically tighten their belts since last year.
