MSFT Microsoft to lay Off 1,900 Activision Blizzard And Xbox Employees

MSFT Microsoft to lay Off 1,900 Activision Blizzard And Xbox Employees per the Verge

See full article: https://www.theverge.com/2024/1/25/24049050/microsoft-activision-blizzard-layoffs

Microsoft Gaming is embarking on a restructuring initiative that will see a reduction of approximately 1,900 roles, constituting about 8% of the total workforce within the division, which currently stands at around 22,000 employees. The decision, as outlined in an internal memo from Microsoft Gaming CEO Phil Spencer, is part of a broader strategy aimed at aligning and executing plans with a sustainable cost structure. This move follows the integration of teams from Activision, Blizzard, and King into Microsoft, which occurred just over three months ago.

In the internal memo, Spencer emphasized the commitment to navigating this process thoughtfully and assured that the affected individuals, who have played significant roles in the success of Activision Blizzard, ZeniMax, and the Xbox teams, will be provided with support during the transition. The support includes severance benefits that will be informed by local employment laws. The memo also urged employees to treat departing colleagues with respect and compassion in line with the company's values.

The restructuring comes amid efforts to set priorities, identify areas of overlap, and ensure alignment on growth opportunities for the united Microsoft Gaming and Activision Blizzard entities. Despite the difficult nature of the decision, the leadership expresses confidence in the remaining workforce's ability to continue creating and nurturing games, stories, and worlds that bring players together.

Simultaneously, Blizzard president Mike Ybarra has decided to depart from the company, having seen the acquisition through as Blizzard’s president. To fill this vacancy, Microsoft plans to announce a new Blizzard president next week. Additionally, Allen Adham, Blizzard’s chief design officer and one of its co-founders, is also leaving the company. Acknowledging Adham's broad impact on all of Blizzard’s games, the internal memo notes that his influence will continue to be felt, and Adham plans to contribute to mentoring young designers across the industry.

As part of these changes, Blizzard's previously announced survival game has been canceled, with Microsoft redirecting some of the affected personnel to promising new projects that Blizzard has in the early stages of development.

The restructuring and leadership changes come in the aftermath of Microsoft's $68.7 billion acquisition of Activision Blizzard in October. Notably, former Activision Blizzard CEO Bobby Kotick stepped down at the end of December, with Microsoft opting not to appoint a direct replacement. Instead, a group of Activision Blizzard executives now report to Matt Booty, Microsoft’s game content and studios president.

These workforce adjustments occur a few months after significant leadership changes within Xbox, including the promotion of Sarah Bond to Xbox president, overseeing all Xbox platform and hardware work. Furthermore, Matt Booty's promotion to president of game content and studios, responsible for overseeing Bethesda, ZeniMax studios, and Activision Blizzard, reflects Microsoft's ongoing efforts to navigate the dynamic landscape of the gaming industry.

Microsoft is expected to report its fiscal Q2 2024 earnings next week, incorporating the impact of the Activision Blizzard acquisition for the first time since completion.