Everything You Need to Know About Microsoft's Massive Layoffs in the Gaming Division

What is the impact of Microsoft’s massive layoffs in the gaming division?

In a surprising move, Microsoft has decided to lay off 1,900 employees from its gaming division, affecting mainly those who were part of the recently acquired Activision Blizzard, according to an internal memo obtained by The Verge.

Which departments within Microsoft are affected by the layoffs?

The job cuts have not only affected Activision Blizzard employees, but also some staff from Xbox and ZeniMax.

What triggered these layoffs?

The layoffs come just three months after Microsoft completed its acquisition of Activision Blizzard for a staggering $69 billion. Unfortunately, the state of affairs has changed, resulting in over 8% of Microsoft’s 22,000-strong gaming division workforce being let go.

What were the potential benefits of the acquisition?

The acquisition of Activision Blizzard brought renowned game franchises such as Call of Duty, World of Warcraft, Diablo, and Candy Crush into Microsoft’s portfolio. Although these games have not yet been added to Xbox Game Pass, Microsoft’s game subscription service, there is a possibility that they will be included in 2024.

Why were regulators concerned about the deal?

Regulators, including the Federal Trade Commission and the UK Competition and Markets Authority, were concerned that Microsoft’s acquisition of Activision Blizzard could lead to reduced competition in the gaming industry. These concerns have now materialized with the significant layoffs of game developers.

What is the impact on the gaming industry as a whole?

The layoffs in Microsoft’s gaming division add to the already alarming number of job losses in the gaming industry. In this year alone, the industry has seen over 5,800 developers lose their jobs.

Is this a common pattern in the game development industry?

Unfortunately, the chain of acquisitions followed by layoffs is not uncommon in the game development industry. Other notable cases include Epic Games laying off developers from Media Tonic and Embracer shutting down Volition.