In a recent internal memo obtained by The Associated Press, Microsoft reveals plans to lay off approximately 1,900 employees, constituting an 8% reduction in its 22,000-person gaming workforce. The move comes just over three months since Microsoft completed its $69 billion acquisition of video game giant Activision Blizzard. The affected employees were part of teams associated with Activision Blizzard, Xbox, and ZeniMax, all owned by Microsoft.
Microsoft Gaming CEO Phil Spencer expressed the commitment of both Microsoft Gaming and Activision Blizzard leadership to formulate a strategy and execution plan for a sustainable cost structure supporting their growing business in 2024. The company did not immediately respond to requests for comments.
Blizzard President Mike Ybarra announced his departure from the company on Thursday, acknowledging the challenging day and offering support to impacted individuals. Ybarra stated that leaving Blizzard was an honor.
The $69 billion Activision Blizzard deal was finalized in October, overcoming opposition from antitrust regulators in the UK and EU. While the U.S. Federal Trade Commission lost a court battle to block the acquisition, antitrust enforcers are still pursuing a case seeking to unwind the deal, citing concerns about competition in the video game industry.
The layoffs at Microsoft follow a trend of job cuts in the tech sector, with companies like Google, Riot Games, TikTok, eBay, and Amazon implementing workforce reductions. Microsoft had previously eliminated a significant number of roles in January 2023, cutting 10,000 workers, almost 5% of its workforce.
The Communications Workers of America emphasized the importance of having a union voice on the job in response to the layoffs, citing their ongoing efforts to organize video game employees, including those at Microsoft’s gaming divisions. Microsoft, in a unique arrangement, pledged neutrality if Activision Blizzard workers in the U.S. and Canada seek to organize into a labor union, as part of a 2022 agreement with the CWA addressing concerns about the merger’s impact. Currently, only a small set of Activision Blizzard divisions have formed unions.
