Microsoft’s Restructuring Efforts Impact Gaming Industry: Activision Blizzard Faces Layoffs
In a surprising turn of events, Microsoft has announced its decision to lay off a portion of its gaming workforce, joining the ranks of publishers making similar cuts. Among the companies affected by this decision are Activision Blizzard, Xbox, and ZeniMax. The reduction in staff is expected to account for approximately 8 percent of the total number of employees in the gaming industry, which currently stands at 22,000 individuals.
An internal memorandum from Phil Spencer, the head of Microsoft Gaming, reads as follows:
“It has been slightly over three months since the merger of Activision, Blizzard, and King with Microsoft. As we move forward in 2024, Microsoft Gaming and Activision Blizzard’s leadership have committed to developing a strategy and an action plan with a sustainable cost structure that will support our growing business as a whole. Together, we have set priorities, identified overlapping areas, and ensured alignment on the best growth opportunities. As part of this process, we have made the painful decision to reduce the number of gaming positions by approximately 1,900 out of our team’s total of 22,000. The gaming leadership team and I are committed to conducting this process in the most thoughtful manner possible. The individuals directly affected by these reductions have played significant roles in the success of Activision Blizzard, ZeniMax, and Xbox, and they can be proud of everything they have accomplished here. We are grateful for all the creativity, passion, and dedication they have brought to our games, our players, and our colleagues. We will provide full support to those impacted during this transition, including severance packages in accordance with local employment regulations. Individuals whose roles will be affected will be notified, and we kindly ask that you treat your departing colleagues with respect and compassion, in line with our values. In the future, we will continue to invest in areas that will grow our business and support our strategy of delivering more games to a larger number of players worldwide. Although this is a challenging time for our team, I have never been more confident in your ability to create and nurture games, stories, and worlds that connect players.”
Reports indicate that many of the affected employees include customer support personnel, with plans for their outsourcing in the future. This also extends to several community managers who play vital roles in the collaboration surrounding Blizzard’s popular titles.
A notable concentration of layoffs occurred within the team working on a new survival game for Blizzard. Codenamed “Project Odyssey,” the game had been in various stages of development since 2017, with momentum growing in 2022. Close to 100 people were involved in the project, and while the goal of releasing it in 2026 was ambitious, it was not entirely unattainable. However, the team has since been let go, and the project has been officially canceled.
The departure of Blizzard’s president, Mike Ybarra, along with the company’s co-founder, Allen Adham, who returned to the company in 2016, also adds another layer of uncertainty to these decisions.
These developments add to an already unstable year for the gaming industry – our journey through January is far from over, yet we’re already witnessing an accumulation of job losses, which account for nearly 60% of all job losses in 2023. Almost 5,900 gaming-related layoffs involving major players in the industry paint a gloomy picture of the future for those looking to establish themselves in this field.
Acknowledgments to The Verge, with additional details provided by Bloomberg’s Jason Schreier.
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