- Microsoft laid off around 1,900 Activision Blizzard employees this week (8% of the gaming division) to align strategies, reduce overlap, and create a sustainable cost structure.
- Leadership changes are also occurring, with Blizzard President Mike Ybarra and co-founder Allen Adham departing. A new Blizzard President will be announced.
- An unannounced Blizzard survival game was cancelled, with employees shifting to other early Blizzard concepts instead. The moves aim to bring more games to more players.
Microsoft announced it is laying off around 1,900 employees this week, primarily affecting the Activision Blizzard division Microsoft acquired in late 2022. The layoffs represent about 8% of Microsoft’s gaming division workforce.
Reasons for the Layoffs
The layoffs come as Microsoft aims to align Activision Blizzard and Xbox strategies and create a sustainable cost structure to support future gaming growth. Microsoft Gaming CEO Phil Spencer explained in a memo that leadership identified areas of overlap across Activision Blizzard, ZeniMax, and Xbox that led to the cuts.
While unfortunate, Microsoft aims to navigate the layoffs thoughtfully and provide support like severance packages. Spencer remains confident these decisions will allow Microsoft to bring more games to more players.
Leadership Changes
Alongside the layoffs, some Activision Blizzard leadership roles are changing. Blizzard President Mike Ybarra has decided to leave the company after overseeing the acquisition.
Additionally, Blizzard co-founder Allen Adham, currently Chief Design Officer, is departing. A new Blizzard President will be announced next week.
Impact on Projects
As part of realigning teams, Blizzard is ending development on an unannounced survival game. Employees from that project will shift to other early Blizzard concepts instead.
Industry Context
The tech industry overall is experiencing hiring slowdowns and layoffs. This month alone Riot Games, Google, Twitch, eBay, and others have cut staff.
Microsoft itself laid off around 10,000 employees a year ago. It’s clear the economic landscape is prompting many companies, including Microsoft, to trim costs.
What’s Next
Microsoft reports fiscal Q2 2024 earnings next week, which will include initial results from acquiring Activision Blizzard.
While workforce changes are difficult, Microsoft aims to build on Blizzard’s momentum and continue delivering top games. The company remains focused on bringing games to more players across more platforms.
