Microsoft Gaming Division Layoffs: 1,900 Staff Affected After $69 Billion Merger

The aftermath of Microsoft’s $69 billion merger with Activision-Blizzard unfolds as the gaming giant announces layoffs affecting almost 2,000 employees in its gaming division.

Xbox boss Phil Spencer conveys the painful decision in a verified memo, disclosing plans to reduce the workforce by 1,900 out of 22,000 staff members.

This move, coming three months post-merger, impacts staff not only within the Xbox division but also at publisher Zenimax, overseeing renowned studios like Bethesda and Arkane.

The exact breakdown of affected employees in each business remains undisclosed.

A second verified letter, sent to Blizzard staff from Microsoft Studios head Matt Booty, reiterates the company’s commitment to providing full support, including severance benefits aligned with local employment laws.

The letter also confirms the discontinuation of development on a survival game project known as Odyssey.

In the broader context, the aftermath of the merger has witnessed notable departures.

Activision CEO Bobby Kotick left the company after the deal’s completion, and now, Blizzard boss Mike Ybarra announces his departure, expressing gratitude for leading the company through an extraordinary period.

The gaming industry, already grappling with layoffs earlier in the year, sees Microsoft’s move as part of a larger trend.

Riot Games recently announced an 11% reduction in its global workforce, adding to the industry-wide layoffs that affected Unity, Twitch, and various smaller studios in 2023.

The total number of gaming industry job losses last year exceeded 10,000, reflecting the sector’s recalibration after a boost during the Covid pandemic.

Experts attribute these industry-wide layoffs to the cost-of-living crisis and the gaming industry’s adjustment post-pandemic.

As Microsoft faces inquiries about the layoffs in its gaming division, the broader tech sector has also witnessed significant workforce reductions, emphasizing the wider impact of this trend across the industry.