What just happened? Microsoft is reportedly laying off 1,900 employees from its gaming division. The majority of the layoffs are at the recently-acquired game studio Activision Blizzard, although some workers at the company's Xbox and ZeniMax divisions will also be affected. Before the layoffs, Microsoft's gaming division had 22,000 employees, and the job cuts will impact around eight percent of the total workforce.
The Verge obtained an internal memo from Microsoft Gaming CEO Phil Spencer confirming the layoffs. Spencer mentioned that the downsizing is part of the company's plan to reduce overlap and establish a "sustainable cost structure." He assured that all affected workers will receive severance benefits in accordance with local employment laws. Looking ahead, Spencer expressed the company's commitment to investing in growth areas and bringing "more games to more players around the world."
It's not immediately clear whether most of the affected employees are based at the company's Redmond headquarters or in London, where Activision Blizzard has a sizable workforce. The company is renowned for several blockbuster gaming franchises, including Call of Duty and World of Warcraft, among others.
In related news, Microsoft is losing key executives, including Blizzard President Mike Ybarra and Chief Design Officer Allen Adham. Ybarra, who has been with Blizzard for over 20 years, will be departing, and the company plans to announce a new president next week.
Tech firms have been laying off tens of thousands of employees over the past couple of years, and 2024 is seemingly no exception. In the first few weeks of this year, Google cut around 1,000 jobs, Discord retrenched 17 percent of its employees, Unity laid off around 25 percent of its staff, and Twitch reduced its workforce by about 33 percent. Twitch's parent company, Amazon, also let go of hundreds of employees from Prime Video and MGM Studios.
Microsoft itself has significantly reduced its workforce over the past year, cutting 10,000 jobs in Q1 2023. The company had more than 220,000 employees globally before the job cuts, affecting around five percent of its workforce. The Xbox division has also seen major leadership changes in recent months, with Sarah Bond promoted to president and Matt Booty elevated to president of game content and studios.