Microsoft To Lay Off 1900 Employees, Roughly 8% of Their Entire Gaming Division

It has been confirmed via an internal memo from Microsoft Gaming’s CEO Phil Spencer to The Verge that Xbox is laying off 1900 employees. The memo states that their gaming workforce, which contains around 22,000 employees, will be losing approximately 8% of its total staff. At the same time, Blizzard president Mike Ybarra is leaving the company after spending more than 20 years at Microsoft, with a new president being named next week.

Allen Adham, Blizzard’s chief design officer, also announced his departure. “As one of Blizzard’s co-founders, Allen has had a broad impact on all of Blizzard’s games. His influence will be felt for years to come, both directly and indirectly as Allen plans to continue mentoring young designers across the industry,” says Matt Booty, Microsoft’s game content and studios president. As part of the shakeups, Blizzard’s untitled survival game announced in 2022 has been canceled. Booty says Microsoft will take those previously working on the project to shift onto “one of several promising new projects Blizzard has in the early stages of development”.

In his memo, Phil Spencer states that the layoffs are part of Microsoft and Activision Blizzard’s attempts to agree on a plan “with a sustainable cost structure that will support the whole of our growing business.” Spencer says that Microsoft will give full support to anyone affected throughout the transition, including severance payments based on local employment laws. This news comes in just three months after Microsoft finalized their acquisition to own Activision Blizzard for $68.7 billion, the largest deal in the gaming industry, and soon after the tech giant was valued at $3 trillion dollars.

These layoffs come a week after Riot Games, the company behind Valorant and League of Legends, announced more than 500 layoffs. Other companies such as Amazon, Discord, Google, and Twitch have also announced layoffs. This comes on the heels of thousands of layoffs within the industry in 2023. Layoffs happen, but the overwhelming amount of them over the last year, across every segment of the industry, reveals how poorly the people who make games are treated by the people who most profit off of them. Analysts expect layoffs to continue throughout the year, across the tech and gaming industry.