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Microsoft laying off 1,900 Activision Blizzard and Xbox workers

8% of Microsoft’s 22,000 gaming division cut

Microsoft Xbox logo on a glitchy green background Illustration: James Bareham/Polygon
Nicole Carpenter is a senior reporter specializing in investigative features about labor issues in the game industry, as well as the business and culture of games.

Microsoft is laying off 1,900 workers — or around 8% of Microsoft Gaming’s 22,000 employees — from its gaming division. The majority of layoffs are at Activision Blizzard, according to the Verge, though cuts will impact Xbox and ZeniMax employees, too.

Microsoft Gaming CEO Phil Spencer sent out a memo to staff Thursday morning to announce the cuts:

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

Microsoft has not responded to Polygon’s request for comment, nor has it issued a public statement.

Blizzard president Mike Ybarra, who previously worked for Microsoft for more than 20 years, will leave the company, he posted on X, formerly Twitter. “As many of you know, Mike previously spent more than 20 years at Microsoft. Now that he has seen the acquisition through as Blizzard’s president, he has decided to leave the company,” Microsoft studios president Matt Booty said in a statement published by the Verge. Alongside the job losses, Microsoft is also canceling Activision Blizzard’s unannounced survival game to instead focus efforts on “one of several promising new projects Blizzard has in the early stages of development.”

Microsoft completed its acquisition of Activision Blizzard after a 21-month fight with government regulators. The United States and United Kingdom’s regulators attempted to block the deal, which eventually went through in October 2023.

January has been a devastating month for job losses in the video game industry; with Microsoft’s 1,900 employees out of work, the total video game industry layoffs in 2024 rises to nearly 6,000, according to industry counts. Last year, more than 10,000 people were laid off from video game companies, and 2024 is, devastatingly, on pace to break that total — the first month of the year hasn’t even ended yet. This week, Riot Games announced it was laying off 530 people, or 11% of its staff. These cuts were preceded by large-scale layoffs at Unity and Twitch. Companies like Thunderful Games, People Can Fly, Lost Boys Interactive, and Behaviour Interactive have also seen cuts in January, among too many more.

Video game industry layoffs are among game developers’ top concerns, according to a Game Developers Conference survey. Reasons for the layoffs vary among companies, but it all adds up to challenging environment for the industry’s workers to thrive in.

“The most striking observation derived from job losses in the industry — naturally a pressing concern for many,” Omdia research director Dom Tait said in the GDC report. “Among the insightful developer comments on the subject was the following: ‘Studios grew too quickly during the pandemic.’ This statement is borne out by games industry data, which shows a COVID driven hump of extra revenue in 2020 and 2021, collectively totaling about $50bn over expected figures. But 2022 and 2023 showed a reversion to the spend trendline seen prior to 2020, thus this reduction in headcount is partly caused by companies belatedly adjusting to the new, less positive market reality.”

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