Microsoft is set to lay off 1,900 employees at Activision Blizzard and Xbox, marking roughly 8% of the total Microsoft Gaming division’s workforce of approximately 22,000. These job cuts are part of Microsoft’s efforts to align its strategy and execution plan with a sustainable cost structure following its $68.7 billion acquisition of Activision Blizzard in October. The layoffs primarily affect Activision Blizzard roles but will also impact some employees in the Xbox and ZeniMax divisions. The decision comes as Microsoft aims to prioritize areas for growth and streamline operations.
The layoffs were announced in an internal memo from Microsoft Gaming CEO Phil Spencer, who expressed confidence in the team’s ability to navigate the changes and continue creating innovative games. Alongside the job cuts, Blizzard President Mike Ybarra has decided to leave the company, and a new Blizzard president will be named next week. Allen Adham, Blizzard’s chief design officer and co-founder, is also leaving the company. As part of these changes, Blizzard’s previously announced survival game has been canceled, with Microsoft redirecting some of the team to other promising projects in early development.
The latest layoffs follow a series of leadership changes at Microsoft, with Sarah Bond promoted to Xbox president and Matt Booty elevated to president of game content and studios, overseeing Bethesda, ZeniMax studios, and Activision Blizzard. These moves are part of Microsoft’s broader strategy to enhance its gaming portfolio and capitalize on the acquisition of major gaming companies. The company last announced significant layoffs a year ago, affecting 10,000 employees. The impact of the Activision Blizzard acquisition will be reflected in Microsoft’s fiscal Q2 2024 earnings report.
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