Software company Microsoft has laid off 1,900 employees spread across recently-acquired Activision Blizzard and the company’s gaming workforce.
The layoffs were announced via an internal memo sent by Microsoft Gaming CEO Phil Spencer. It has also been revealed that Blizzard president Mike Ybarra as well as Allen Adham, Blizzard’s Chief Design Officer, decided to leave the company.
The round of layoffs comes just days after another major player in the gaming industry, Riot Games announced more than 530 layoffs across several markets and divisions.
Microsoft’s gaming team is much larger than Riot Games, with the layoffs representing around 8.6% of the company’s total gaming workforce of around 22,000 people.
According to an internal memo obtained by news outlet The Verge, Microsoft Gaming CEO Phil Spencer explained the reasoning behind the layoffs: “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.”
Microsoft acquired Activision Blizzard in late 2023 after a long series of legal hurdles for a price of $58.7b. Since the purchase, the company has been relatively quiet regarding restructuring up until now. Alongside Activision Blizzard, Microsoft also owns gaming giant Xbox.
Along with the layoffs, two significant people from Blizzard Entertainment’s history, President Mike Ybarra and Allen Adham, Blizzard’s Chief Design Officer, also decided to leave the company. In addition, Blizzard’s untitled new survival game was cancelled as the company aims to “shift some of the people working on it” to other projects in the early stages of development.
The layoffs make Microsoft the latest in a long string of gaming companies to experience similar moves this January. In addition to the mentioned Riot Games layoffs, streaming giant Twitch laid off 500 people, and Unity laid off almost 2,000 people. Discord, a well-known chat platform, laid off 170 people as well.