Microsoft lays off 1,900 workers, nearly 9% of gaming division, after Activision Blizzard acquisition

26.01.2024

Microsoft is set to reduce its workforce in the gaming unit by approximately 9%, resulting in the layoff of around 1,900 employees, as revealed in a memo obtained by CNBC on Thursday. The restructuring, spearheaded by Microsoft Gaming CEO Phil Spencer, is part of a broader “execution plan” aimed at minimizing areas of overlap. This move comes just over three months after Microsoft’s completion of the acquisition of Activision Blizzard.

Notable departures include former Blizzard President Mike Ybarra, who announced his departure on the social media platform X, and Blizzard co-founder Allen Adham, the unit’s design chief. Additionally, Blizzard will halt the development of a new survival game, as stated in a memo by Matt Booty, head of Microsoft’s gaming studios, which was published by The Verge and confirmed as authentic by a Microsoft spokesperson.

Phil Spencer assured that Microsoft would offer full support, including location-dependent severance, to all affected employees. Despite the significant layoffs, Microsoft shares remained largely unaffected, possibly due to the anticipated workforce adjustments following large mergers.

Activision Blizzard, known for popular gaming franchises like Call of Duty and Diablo, was acquired by Microsoft for $69 billion, marking the company’s largest-ever deal. The tech industry has witnessed a trend of efficiency-focused measures in the wake of economic pressures, with several major companies implementing layoffs. Notably, tech giants like Tencent-owned Riot Games, TikTok, and Discord have undergone significant workforce reductions in the early weeks of 2024.

In contrast to Microsoft’s situation, eBay and SAP recently announced workforce reductions of 1,000 and 8,000 employees, respectively, resulting in a notable increase in their share prices. This underscores the varying market responses to restructuring initiatives within the tech sector.