Microsoft's Restructuring: 1,900 Employees Impacted in Major Gaming Division Overhaul
In a surprising move, Microsoft has announced significant layoffs, affecting 1,900 employees at both Activision Blizzard and Xbox. The restructuring comes just three months after Microsoft's $68.7 billion acquisition of Activision Blizzard. The decision is part of a strategic alignment and cost-cutting effort, impacting approximately 8 percent of the Microsoft Gaming division, which boasts a total workforce of around 22,000 employees.
The restructuring is not only limited to workforce reduction but also includes leadership changes. Blizzard president Mike Ybarra has chosen to leave the company after more than 20 years at Microsoft. Additionally, Allen Adham, Blizzard's Chief Design Officer and a co-founder, is departing from the company. Microsoft plans to announce a new Blizzard president next week.
As a consequence of these changes, Blizzard's previously announced survival game has been cancelled. However, Microsoft assures that the resources from this project will be redirected to other promising endeavours currently in the early stages of development. The company aims to streamline its focus on products and strategies that hold the most promise for future growth.
Microsoft Gaming CEO Phil Spencer, in an internal memo, stated, "As we move forward in 2024, the leadership of Microsoft Gaming and Activision Blizzard is committed to aligning on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business." The memo emphasised the difficulty of the decision and expressed gratitude for the impacted employees' contributions.
Matt Booty, President of Game Content and Studios, echoed these sentiments in another internal memo, shedding light on the company's commitment to providing support to those affected during the transition. The changes are part of a more focused strategy across Microsoft Gaming, aiming for sustainable growth and aligning talent and resources with top priorities.
This move by Microsoft comes amidst a series of workforce reductions in the gaming industry. In the same month, companies like Riot Games, Google, Discord, Twitch, Unity, eBay, and others have also announced layoffs.
The recent layoffs at Microsoft reflect a period of significant transformation and realignment within the gaming industry giant. As the company navigates through this challenging phase, it remains committed to its goal of bringing more games to players worldwide. The leadership changes and cancellations of projects underscore Microsoft's dedication to streamlining operations and fostering growth in the dynamic and ever-evolving gaming landscape. The coming weeks will undoubtedly be crucial as the company works to ensure a smooth transition for the affected employees and looks towards the future with renewed focus and determination.