Microsoft cuts 1,900 jobs, including at Activision Blizzard and Xbox, as layoffs hit videogame industry

By James Rogers

Cuts target 'areas of overlap' following Activision Blizzard acquisition

Microsoft Corp. is cutting 1,900 workers in its gaming business, according to a report, making it the latest tech company to conduct videogame-related layoffs.

Microsoft (MSFT) gaming CEO Phil Spencer told employees that the cuts aim to reduce "areas of overlap" following the tech giant's acquisition of Activision Blizzard last year, CNBC reported, citing a memo sent Thursday. In the memo, Spencer said that people impacted by the reductions have played "an important part" in the success of the Activision Blizzard, ZeniMax and Xbox teams. Microsoft acquired ZeniMax Media, the parent company of game publisher Bethesda Softworks, in 2021.

The Verge reports that Microsoft is primarily laying off roles at Activision Blizzard, but adds that some Xbox and ZeniMax employees will be impacted. Blizzard President Mike Ybarra has also decided to leave the company, according to the Verge, citing an internal memo from Matt Booty, the head of Xbox Game Studios and Microsoft Studios.

Related: Microsoft's acquisition of Activision makes Big Tech even bigger - and harder to rein in

"To the Blizzard community: I also want to let you all know today is my last day at Blizzard," Ybarra wrote Thursday on X, the platform formerly known as Twitter. "Leading Blizzard through an incredible time and being part of the team, shaping it for the future ahead, was an absolute honor. Having already spent 20+ years at Microsoft and with the acquisition of Activision Blizzard behind us, it's time for me to (once again) become Blizzard's biggest fan from the outside."

The latest tech-sector layoffs have impacted the gaming industry as a whole. Earlier this month, Amazon.com Inc. (AMZN) announced plans to cut 500 jobs in its Twitch live-streaming business, which is popular with gamers, and videogame-software maker Unity Software Inc. (U) said it plans to cut around 1,800 employees, or 25% of its workforce. On Monday, videogame maker Riot Games, which is owned by the Chinese tech giant Tencent Holdings Ltc. (HK:700), said it would cut around 530 jobs globally, or about 11% of its total workforce.

Game developer and gaming-industry consultant Rami Ismail wrote on X Thursday that in the first few weeks of 2024, the videogame industry has already seen more than half the number of layoffs that it did in all of 2023.

Related: Amazon's Twitch plans to slash 500 jobs, in latest tech layoffs

"I just ran the numbers," Ismail wrote. "With todays' [sic] Activision-Blizzard/Microsoft layoffs added, in just 25 days of 2024 we're already at over HALFWAY to the total layoffs of ALL OF 2023 (5,600 versus 10,500)."

Tech-sector layoffs were a theme of 2023 and remain in the spotlight. Earlier this month, Xerox Holdings Corp. (XRX) announced plans to cut 15% of its workforce, and eBay Inc. (EBAY) said it is cutting about 1,000 jobs, or 9% of its full-time workforce. Amazon is also cutting "several hundred" roles across its Prime Video and MGM Studios organization.

Earlier this week, Bloomberg reported that Google parent Alphabet Inc. (GOOGL) (GOOG) is laying off dozens of workers at its X technology lab.

Alphabet has not yet responded to a request for comment from MarketWatch.

Related: Tech layoffs in the spotlight again as 2024 kicks off with Xerox job cuts

So far this year, 82 tech companies have laid off 23,670 employees globally, according to data compiled by the website Layoffs.fyi. If that pace of layoffs continues throughout 2024, it would surpass the total from 2023, when 1,183 tech companies laid off 261,997 employees globally. That was up significantly from 2022, when 1,064 tech companies laid off 164,969 employees, according to the website.

Jon Swartz and Bill Peters contributed.

-James Rogers

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01-25-24 1437ET

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