- Microsoft’s gaming division lays off 1,900
- Layoffs follow $69B merger
- Gaming industry faces workforce reductions
After completing its $69 billion (£54.3 billion) merger, Microsoft’s gaming division will lay off nearly 2,000 employees.
In a memo, Xbox CEO Phil Spencer informed employees that the company intends to reduce its workforce by 1,900 out of 22,000 employees.
The file was transmitted three months after the software behemoth acquired Activision-Blizzard, the developer of the Call of Duty and Warcraft franchises.
Microsoft has authenticated the letter in which Mr. Spencer says terminating employees was “devastating.”
Initiated by the tech website The Verge, the message implies that Zenimax, the parent company of Bethesda and Arkane, among other studios, will also impact its staff members working in the Xbox division.
A subsequent correspondence, which was also verified by Microsoft and published by The Verge, was addressed to Blizzard personnel by Microsoft Studios chief Matt Booty.
He said affected employees would meet throughout the day and inform non-North American personnel afterward.
In line with Mr Spencer’s statement, the company “would offer our complete backing… including severance benefits that are by local employment regulations.”
Additionally, it was verified that work had ceased on the survival game project called Odyssey.
Last September, Microsoft acquired Activision-Blizzard and Candy Crush maker King after regulatory difficulties.
Following the transaction’s closing, Activision CEO Bobby Kotick resigned without being replaced directly.
And after the most recent development, an additional senior executive resigned.
Former Microsoft employee and current Blizzard CEO Mike Ybarra said in a statement that it had been “an honor” to guide the company “through an incredible time” and that he would revert to his role as its “biggest fan from the outside.”
The video game sector has seen staff cutbacks this year after redundancy declarations in 2023.
This week, League of Legends maker Riot Games announced 11% global layoffs.
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After smaller studios laid off staff, Unity lost 1,800 jobs, while Twitch lost 500.
The exact number of gaming industry job losses may be higher than 10,000 estimated last year.
According to experts, the trend has likely been significantly influenced by the cost-of-living crisis. The gaming industry’s downturn followed a period of growth spurred by the COVID-19 pandemic.
Massive layoffs occurred throughout the technology industry as well. Microsoft laid off 10,000 employees in January, and Amazon, Meta, and others cut workers.
