Microsoft Is Laying Off 1900 Employees Across Xbox, Activision Blizzard, And ZeniMax

Update, 9:51 a.m. ET, 1/25/24:

Bloomberg reporter Jason Schreier is reporting that Blizzard Entertainment president Mike Ybarra "is also out" as part of Microsoft's 1,900 job cuts across its various gaming divisions. Ybarra has worked at Blizzard since 2019, first as executive vice president and general manager of platform and technology before becoming president of the company in 2021. Before that, he worked for Microsoft for more than 19 years in various positions like corporate vice president of Xbox Live and Game Pass and partner studio manager for Xbox Studios. 

Schreier is also reporting that Allen Adham, chief design officer and Blizzard founder is leaving the company following these layoffs, and that Odyssey, the studio's in-development survival game, has been canceled. 

The original story continues below...

Original story, 9:43 a.m. ET, 1/25/24:

Microsoft is laying off roughly 1,900 employees across its Xbox, Activision Blizzard, and ZeniMax teams. This news comes by way of IGN, which has learned from sources that Microsoft Gaming CEO Phil Spencer sent a memo to staff explaining the layoffs.

Spencer cites the need to align strategy with a sustainable cost structure. Notably, Microsoft spent $69 billion in October to acquire Call of Duty and Overwatch maker Activision Blizzard, and it spent $7.5 billion in 2020 to acquire ZeniMax Media. 

Here's Spencer's memo to staff in full, from IGN: 

"It's been a little over three months since the Activision, Blizzard, and King teams joined Microsoft. As we move forward in 2024, the leadership of Microsoft Gaming and Activision Blizzard is committed to aligning on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business. Together, we've set priorities, identified areas of overlap, and ensured that we're all aligned on the best opportunities for growth.

"As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1900 roles out of the 22,000 people on our team. The Gaming Leadership Team and I are committed to navigating this process as thoughtfully as possible. The people who are directly impacted by these reductions have all played an important part in the success of Activision Blizzard, ZeniMax and the Xbox teams, and they should be proud of everything they've accomplished here.

"We are grateful for all of the creativity, passion and dedication they have brought to our games, our players, and our colleagues. We will provide our full support to those who are impacted during the transition, including severance benefits informed by local employment laws. Those whose roles will be impacted will be notified, and we ask that you please treat your departing colleagues with the respect and compassion that is consistent with our values.

"Looking ahead, we'll continue to invest in areas that will grow our business and support our strategy of bringing more games to more players around the world. Although this is a difficult moment for our team, I'm as confident as ever in your ability to create and nurture the games, stories, and worlds that bring players together."

These job cuts come just a week after Xbox's 2024 Developer Direct showcase, which is where we learned Senua's Saga: Hellblade II will be released in May, what the first-person combat in Obsidian's Avowed looks like, and that Square Enix's Visions of Mana hits PlayStation, Xbox, and PC this summer. We also got our first look at Ara: History Untold, and the first taste of gameplay from Indiana Jones and The Great Circle, Machine Games' first-person take on the famed archaeologist that hits Xbox later this year. 

These Microsoft layoffs join a string of other disheartening 2024 job cuts, which total more than 5,500 in just the first 25 days of the year. Outriders studio People Can Fly laid off more than 30 employees this week, and League of Legends company Riot Games laid off 530 employees this week, too. 

We recently learned Lords of the Fallen Publisher CI Games was laying off 10 percent of its staff, that Unity would be laying off 1,800 people by the end of March, and that Twitch had laid off 500 employees. 

We also learned that Discord had laid off 170 employees, that layoffs happened at PTW, a support studio that's worked with companies like Blizzard and Capcom, and that SteamWorld Build company, Thunderful Group, let go of roughly 100 people. Dead by Daylight developer Behaviour Interactive also reportedly laid off 45 people, too. 

Last year, more than 10,000 people in the games industry or game-adjacent industries were laid off. 

In January of last year, Microsoft laid off 10,000 employees amidst its ongoing $69 billion acquisition of Activision Blizzard, which it completed in October. 

Striking Distance Studios, the team behind 2022's The Callisto Protocol, laid off more than 30 employees in August of 2023. That same month, Mass Effect and Dragon Age developer BioWare laid off 50 employees, including long-time studio veterans. The following month, in September, Immortals of Aveum developer Ascendant Studios laid off roughly 45% of its staff, and Fortnite developer Epic Games laid off 830 employees. 

In October of last year, The Last of Us developer Naughty Dog laid off at least 25 employees, and Telltale Games also underwent layoffs, although an actual number of affected employees has not yet been revealed. Dreams developer Media Molecule laid off 20 employees in late October.

In November, Amazon Games laid off 180 staff members, Ubisoft laid off more than 100 employees, Bungie laid off roughly 100 developers, and 505 Games' parent company, Digital Bros, laid off 30% of its staff. 

In December, Embracer Group closed its reformed TimeSplitters studio, Free Radical Design, and earlier in the year, Embracer closed Saints Row developer Volition Games, a studio with more than 30 years of development history. A few weeks before the winter holidays, Dungeons & Dragons and Magic: The Gathering owner Hasbro laid off 1,100 employees. 

The games industry will surely feel the effects of such horrific layoffs for years to come. The hearts of the Game Informer staff are with everyone who's been affected by layoffs or closures.

[Source: IGN]