Three months after finalizing its $68.7 billion acquisition of gaming company Activision Blizzard, Microsoft has announced the layoff of 1,900 employees in its gaming divisions. This amounts to approximately 8.6% of the 22,000 Microsoft employees in the gaming sector. The layoffs come as a part of an execution plan aimed at establishing a sustainable cost structure following the acquisition.
Key Takeaway
Microsoft’s acquisition of Activision Blizzard has led to significant layoffs in the gaming divisions, impacting 1,900 employees. The broader tech industry has also experienced workforce reductions, with January emerging as a challenging month for job cuts.
Blizzard President’s Departure
Blizzard president Mike Ybarra has also revealed his decision to step down following the completion of the acquisition. In a statement, Ybarra expressed gratitude to the impacted employees for their significant contributions to their teams, Blizzard, and players’ lives, emphasizing that the layoffs do not reflect the quality of their work.
Internal Memo and Support for Impacted Employees
An internal memo from Microsoft Gaming CEO Phil Spencer, obtained by The Verge, outlined the rationale behind the layoffs, citing the identification of areas of overlap post-acquisition. The memo also assured full support for the impacted employees during the transition, including severance benefits in accordance with local employment laws. Spencer emphasized the importance of treating departing colleagues with respect and compassion.
Industry-wide Impact
The gaming industry has witnessed a series of layoffs in the early months of 2024. Other major companies, including Riot Games, Unity, Discord, and Twitch, have also implemented significant workforce reductions. Game developer and consultant Rami Ismail reported that approximately 5,600 gaming employees have been laid off in 2024, surpassing half of the total gaming layoffs in 2023.
Broader Tech Industry Impact
The tech industry at large has not been immune to layoffs, with companies such as Google, Amazon, and TikTok also announcing workforce reductions. Data from tech layoffs in 2023 indicates that January tends to be a particularly challenging month for job cuts.
Union Representation and Layoff Impact
Several departments within Microsoft and Activision have established gaming unions in recent years. The Communications Workers of America, representing unionized workers, highlighted the benefits of union representation, particularly in negotiating the impact of layoffs. While CWA-represented members at certain entities will not be affected by the recent cuts, the organization expressed concern for the disruption faced by numerous dedicated and talented video game workers.
