Microsoft is the latest big tech and gaming company to announce a sweeping wave of layoffs across the company, with around 8% of Microsoft’s Gaming group to be affected. That might not seem too awful, but with around 22,000 employees across Xbox, Activision Blizzard King and ZeniMax, it will add up to around 1,900 redundancies.
Xbox boss Phil Spencer has called this a “painful decision” in an internal memo leaked to The Verge. The statement reads:
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
This will surely help to further the cause of developers and employees looking to unionise across the games industry, and within Activision Blizzard King most notably.
However, this kind of decision was almost inevitable for multiple reasons. Firstly, Microsoft, much like the rest of the tech industry, went on a massive hiring spree through and coming out of the Covid-19 pandemic and lockdowns, emboldened by the increased engagement they saw as people were stuck at home. This massively boosted their gaming business for a while as well, and alongside massive acquisitions of ZeniMax and Activision Blizzard, the company headcount has risen dramatically. Now that they’re looking to cut wage bills through the economic slowdown and rising costs, layoffs were bound to happen, even if Microsoft remained ludicrously profitable and could probably keep everybody on without putting a dent in their bank account.
Another factor is that, as they’ve now absorbed multiple major publishers, there is now a significant overlap in what these businesses do. Xbox, ZeniMax and Activision Blizzard each have their own leadership, network of studios and teams around the world, QA testing teams, PR and brand teams, and more. Honestly, it doesn’t really make sense for all of these to be totally independent from one another, when pooled resources could be more efficient and effective. This is an inevitable part of any major acquisition or merger, as sad as it is to see so many people losing their jobs.
Speaking of which, there’s a big shake up at the head of Blizzard, with president Mike Ybarra deciding to leave the company, as is chief design officer and co-founder Allen Adham. Microsoft will announce a new Blizzard president next week.
