Microsoft has confirmed the reduction of its gaming workforce by approximately 1,900 roles, impacting roughly 8.6% of its 22,000-strong team. This news follows three months after the major acquisition of Activision Blizzard for $69 billion, so it may be because of the buyout.
In a message to staff obtained by IGN, Xbox head Phil Spencer acknowledged the “painful decision” and assured continued support for departing employees through severance packages adhering to local employment laws. He emphasized the leadership’s commitment to aligning a future strategy with a sustainable cost structure suitable for the combined entity’s growth.
More on this: Blizzard’s Unannounced Survival Game Canceled Alongside Layoffs
“… As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1,900 roles out of the 22,000 people on our team. The Gaming Leadership Team and I are committed to navigating this process as thoughtfully as possible. The people who are directly impacted by these reductions have all played an important part in the success of Activision Blizzard, ZeniMax and the Xbox teams…”
Phil Spencer
Spencer noted that identifying overlapping areas and prioritizing growth opportunities led to a workforce reduction. In any merger or big buyout, there will be layoffs. This is because you tend to have people who did the same job at both companies, and that job only needs one person to fill the role. This is why mergers tend to be viewed harshly by the employees in those companies.
More on this: Blizzard’s Former President Leaves Following Microsoft Transition
This is normally a big issue for HR, Legal, and teams like that because you don’t need two separate teams. You usually just need a few more employees, so most of one team gets canned. The same goes for Community managers and more; it happens with every business, not just gaming. Still, this seems to be the norm for our industry at this point, and I don’t believe this is an isolated event that has nothing to do with the gaming industry laying off a lot of people.
Recent months have seen staff reductions and studio closures across various studios and companies. Estimates suggest the gaming industry witnessed nearly 10,000 job losses in 2023 alone, and the trend appears to continue in 2024. Although the long-term effects of these layoffs aren’t clear, it’s a significant event for the video game industry. If a giant like Microsoft can lay off that much stuff, it’d make a lot of people feel unsteady in their positions.
Comments