A new year has arrived, but for some, it did not start as pleasant as they’d hoped, with Microsoft announcing an estimated 1,900 layoffs from its gaming division.
According to CNBC, Microsoft Gaming CEO Phil Spencer announced, via a memo, that the layoffs were a part of the company’s greater “execution plan.”
The plan put in place is a measure to “reduce areas of overlap” within the company, the outlet shares. The timing and rationale behind the massive cuts come just a few months after Microsoft acquired gaming company Activision Blizzard for $69 million.
Former Blizzard Entertainment President Mike Ybarra and Co-founder Allen Adham will also be leaving the company during this transition. Ybarra posted his sentiments on X (formerly known as Twitter), explaining the company’s impact and his gratitude for all the work the team had been able to accomplish.
Based on a source who spoke with IGN, Microsoft’s gaming division had already experienced significant cuts to its marketing budget before the nearly 2,000-employee layoff announcement. All of the cutbacks from the tech organization come off the heels of a showcase from Xbox that previewed upcoming games, including MachineGames’ “Indiana Jones and the Great Circle,” Ninja Theory’s “Hellblade 2,” and Oxide Games’ “Ara: History Untold.”
The laid-off employees represent almost 9% of the company’s gaming division. And while this may be a harsh reality for those impacted, Spencer noted the company’s desire to be thoughtful during the process.
“The Gaming Leadership Team and I are committed to navigating this process as thoughtfully as possible. The people 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.”
His memo continued, “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.”
Microsoft’s news compounds on earlier tech layoffs that occurred this year. Those layoffs include announcements from companies such as Riot Games, Discord, and TikTok, totaling more than 10,000 people laid off across all organizations, per CNBC.
