Microsoft To Slash 1,900 Jobs In Gaming Division Amid Strategic Restructuring
1min read According to a memorandum on Thursday, Microsoft will lay off approximately 1,900 employees in its gaming division, amounting to about 9% of its total employee count.
This layoff will mainly aim at staff at Activision Blizzard and Xbox.
Phil Spencer, Chief Executive of Microsoft Gaming, stated that the layoffs are part of a larger execution plan. Spencer added that Microsoft will provide full support to all employees, including severance packages based on location.
He stated in the memo: 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.
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 chief executive wrote.
Following this news, Microsoft's stock price has not seen significant changes, as layoffs are commonly seen after large merger deals.
Microsoft previously acquired Activision Blizzard for 69 billion dollars, marking the largest transaction in the company's history, more than double the size of their LinkedIn acquisition in 2016.
Activision Blizzard is the publisher and developer of several large game series, including Call of Duty and Diablo. Its mobile gaming subsidiary, King, is the developer of Candy Crush Saga. This acquisition was completed just over three months ago.
However, shockingly, former Blizzard president Mike Ybarra announced his departure from Microsoft and Blizzard via the social media platform X on Thursday. Matt Booty, head of Microsoft game studios, revealed in a memo that Blizzard co-founder and head of design, Allen Adham, is also set to leave the company and Blizzard will cease the development of new survival games.
Mike Ybarra also posted his farewell letter on his X account.
With mounting economic pressure, tech investors are beginning to expect higher efficiency and clearer paths to growth or profitability. Just weeks into 2024, tech companies have announced significant layoffs, with most unrelated to mergers.
Earlier this week, eBay announced it would be cutting 1,000 jobs, while SAP declared it would be transferring or acquiring 8,000 employees. However, unlike Microsoft layoffs, eBay and SAP stock prices soared following their announcements of layoffs.