Microsoft Video Games Division to Lay Off 1,900 Staff
Microsoft's gaming division is set to lay off 1,900 staff following its merger deal. The layoffs come after Microsoft's acquisition of Activision-Blizzard. The impact will be felt in the Xbox division and at publisher Zenimax.
In a significant blow to Microsoft's gaming division, nearly 2,000 employees are set to be laid off following the company's $69 billion merger deal. Xbox boss Phil Spencer delivered the news in a memo to workers, revealing plans to reduce the workforce by 1,900 out of the current 22,000 staff. This decision comes three months after Microsoft's acquisition of Activision-Blizzard, renowned for popular franchises such as Call of Duty and Warcraft.
The authenticity of the memo has been verified by Microsoft, and Spencer acknowledged that the decision to let go of employees was a painful one. The impact of the layoffs is expected to affect not only the Xbox division but also publisher Zenimax, which oversees studios like Bethesda and Arkane. BBC Newsbeat has reached out to Microsoft for specific details on the number of employees affected in each business unit.
A second letter, also confirmed by Microsoft, was sent to Blizzard staff from Matt Booty, the head of Microsoft Studios. Booty assured affected employees that meetings would be held throughout the day, with those outside of North America being informed later. The message echoed Spencer's sentiments, emphasizing that the company would provide full support and severance benefits in accordance with local employment laws. Additionally, the letter confirmed the discontinuation of development on a survival game project known as Odyssey.
Microsoft's acquisition of Activision-Blizzard and King, the creator of Candy Crush, faced regulatory hurdles before being finalized in September of last year. Following the completion of the deal, Activision CEO Bobby Kotick departed the company without a direct replacement. In the wake of the recent layoffs, another senior figure at the company, Blizzard boss Mike Ybarra, announced his departure, expressing gratitude for leading the company during an incredible time and stating that he would continue to be a devoted fan from the outside.
The video game industry has already experienced a wave of layoffs this year, with several companies announcing redundancies. Riot Games, the maker of League of Legends, revealed plans to cut 11% of its global workforce. Unity, a game engine maker, laid off 1,800 employees, while Amazon-owned streaming platform Twitch announced 500 job losses. Smaller studios have also been affected by redundancy rounds.
Experts attribute the job losses in the gaming industry to a combination of factors, including the cost-of-living crisis and a scaling back of operations following the surge in demand during the Covid-19 pandemic. The wider tech sector has also witnessed significant cuts, with Microsoft itself announcing 10,000 job losses across the company last January. Other major players like Amazon and Meta have also faced staff reductions.
The BBC has reached out to Microsoft for further comment on the layoffs within its gaming division.
Microsoft's gaming division is set to lay off 1,900 staff following its merger deal.
The layoffs come after Microsoft's acquisition of Activision-Blizzard.
The impact will be felt in the Xbox division and at publisher Zenimax.