Microsoft Is Laying Off 1,900 Video Game Workers, Mostly From Its Activision Blizzard Teams

The video game industry is seeing its second major round of layoffs this week, as Microsoft is set to let go 1,900 employees from its Microsoft Gaming division, about 8% of the unit’s 22,000 workers.

News of the Microsoft layoffs comes just three months after the company completed its acquisition of Diablo, World of Warcraft, and Overwatch developer Activision Blizzard for $68.7 billion, the biggest deal in video game history. Notably, the layoffs were also announced mere hours after Microsoft became just the second company in history to pass the $3 trillion value mark.

This week’s layoffs also come almost exactly one year after Microsoft let go 10,000 workers globally, including employees at gaming subsidiaries such as 343 Studios, Zenimax Media, and Bethesda Games.

Today’s layoffs were announced via an internal office memo from Xbox CEO Phil Spencer, which was obtained and published by gaming trade IGN. It reads:

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

In December of last year, controversial Activision Blizzard CEO Bobby Kotick resigned as part of the Microsoft acquisition. Now, Blizzard Entertainment president Mike Ybbara has announced that he is leaving the company as well.

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 on your amazing work. If there’s anything I can help with, connections, recommendations, etc., DM me.

To the Blizzard community: I also want to let you all know today is my last day at Blizzard. Leading Blizzard through an incredible time and being part of the team, shaping it for the future ahead, was an absolute honor. 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.

To the incredible teams at Blizzard – thank you. Words can’t express how I feel about all of you. You are amazing. Continue to do incredible things and always keep Blizzard blue and the player at the forefront of every decision.

To all of those impacted today – I am always available to you and understand how challenging today’s news is. My heart is with each one of you.

According to The Verge, Microsoft plans to name a new Blizzard president next week.