In layoffs that constitute approximately 8% of the entire Microsoft Gaming division, the majority of the job cuts are expected to take place at Activision Blizzard.
The restructuring also sees departures at the executive level, with Blizzard President Mike Ybarra and Chief Design Officer Allen Adham leaving the company. The Verge was the first to report on Microsoft‘s latest round of job cuts, along with its axing of a survival game project by Blizzard.
The announcement follows Microsoft’s completion of its $69bn acquisition of Activision Blizzard, a move aimed at enhancing its presence in the competitive video gaming market, featuring popular titles such as “Call of Duty,” to better rival industry leader Sony.
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In February 2023, Blizzard executives announced the company was ending remote work for its employees. The move was met with backlash from employees reluctant to move closer to Blizzard’s Irvine, California, headquarters, one of the most expensive areas in the US, where rent has skyrocketed in recent years.
Former CEO Bobby Kotik left the company in December 2023 and received more than $375m in compensation for his time at Blizzard.
Earlier that same month, Activision Blizzard settled a $54.9m lawsuit alleging pay and promotion discrimination against female staff.
This news aligns with a recent trend in the tech sector, where major companies such as Alphabet, Amazon.com, and eBay, have undertaken significant staff reductions to trim costs and enhance profitability. According to tracking website Layoffs.fyi, more than 21,000 workers have been laid off across 76 tech companies in January alone.
The tech industry witnessed a total of 168,032 job cuts in 2023, with Challenger, Gray, and Christmas reporting it as the sector with the highest number of layoffs across industries. This figure included more than 10,000 cuts at Microsoft.
While industry analysts anticipate fewer layoffs in 2024, companies investing heavily in AI technology may still downsize to offset the substantial costs associated with their technological pursuits.
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