Microsoft is due to lay off 1,900 employees from Blizzard and Xbox, according to a company memo sent on Thursday. The cuts amount to about 8% of the Microsoft Gaming division, according to The Verge which broke the news. Additionally, Blizzard Entertainment president Mike Ybarra said on X that he’s leaving the company.
The cuts, coming three months after Microsoft acquired Blizzard for $69 billion, represent around 9% of the 22,000 Microsoft Gaming staffers, CNBC reported. Activision Blizzard is the publisher of a number of hugely popular gaming franchises, among them “Call of Duty” and “Guitar Hero.” The mobile juggernaut “Candy Crush Saga” was developed by its subsidiary King.
I want to thank everyone who is impacted today for their meaningful contributions to their teams, to Blizzard, and to players’ lives. It’s an incredibly hard day and my energy and support will be focused on all those amazing individuals impacted – this is in no way a reflection…
— Mike Ybarra 🎄 (@Qwik) January 25, 2024
Microsoft Gaming CEO Phil Spencer in his memo expressed optimism for the company despite the cuts.
“Looking ahead, we’ll continue to invest in areas that will grow our business and support our strategy of bringing more games to more players around the world,” he said. “Although this is a difficult moment for our team, I’m as confident as ever in your ability to create and nurture the games, stories and worlds that bring players together.”
The layoffs are part of a larger plan of “aligning on a strategy and an execution plan with a sustainable cost structure” that reduces “areas of overlap,” the memo said.
Microsoft shares edged up $4.04, or 1%, to $406.63 on the news, as the broader markets also moved slightly higher.
The layoffs come amid wider cuts at tech companies this month, including TikTok, Discord, eBay and software maker SAP, and after more than 100,000 jobs were cut by the industry in 2023. Microsoft cut 10,000 jobs a year ago.
Microsoft plans to name a new Blizzard president to replace Ybarra next week, The Verge reported. Allen Adham, Blizzard’s cofounder and chief design officer, is also leaving the company.
Bloomberg reported that as recently as November, Ybarra said he planned to stick around. “Someone will drag me out of Blizzard,” he said at the BlizzCon convention. “That’s how long I will be here.”
Blizzardhas cancelled its previously announced survival game, codenamed Odyssey, amid the cuts, but Microsoft’s game content and studios president, Matt Booty said in a memo that the company will be “shifting some of the people working on it to one of several promising new projects Blizzard has in the early stages of development,” The Verge reported.
The cuts come several months after Booty was promoted to his current title and Sarah Bond was promoted to Xbox president.
Microsoft is due to report its fiscal second quarter results on Tuesday, the first that will include Blizzard as part of the company.
