Microsoft Lays Off 1,900 Staff From Its Video Game Workforce

Microsoft is cutting 1,900 staff from its video game workforce, sources have told IGN.

In a message to staff viewed by IGN, Xbox boss Phil Spencer said Microsoft will provide “full support to those who are impacted during the transition, including severance benefits informed by local employment laws.” IGN has asked Microsoft for comment.

The layoffs come following the $69 billion acquisition of Call of Duty owner Activision Blizzard. Microsoft is currently worth more than $3 trillion — the second company to ever break that threshold.

Here’s Spencer’s memo in full:

“It’s been a little over three months since the Activision, Blizzard, and King teams joined Microsoft. 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. Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth.

“As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1,900 roles out of the 22,000 people on our team. The Gaming Leadership Team and I are committed to navigating this process as thoughtfully as possible. The people who are directly impacted by these reductions have all played an important part in the success of Activision Blizzard, ZeniMax and the Xbox teams, and they should be proud of everything they’ve accomplished here. We are grateful for all of the creativity, passion and dedication they have brought to our games, our players and our colleagues. We will provide our full support to those who are impacted during the transition, including severance benefits informed by local employment laws. Those whose roles will be impacted will be notified, and we ask that you please treat your departing colleagues with the respect and compassion that is consistent with our values.

“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. 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.

“Phil.”

As part of the layoffs, Blizzard Entertainment President Mike Ybarra announced he is leaving the company. Ybarra, a former Xbox executive, joined Blizzard in 2019.

Here's Ybarra's statement in full, posted to Twitter / X:

"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 on your amazing work. If there’s anything I can help with, connections, recommendations, etc., DM me.

"To the Blizzard community: I also want to let you all know today is my last day at Blizzard. 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.

"To the incredible teams at Blizzard - thank you. Words can’t express how I feel about all of you. You are amazing. Continue to do incredible things and always keep Blizzard blue and the player at the forefront of every decision.

"To all of those impacted today - I am always available to you and understand how challenging today’s news is. My heart is with each one of you."

Blizzard's chief design officer and co-founder Allen Adham is also leaving the developer behind World of Warcraft, Diablo, and Overwatch. Its long in development survival game, dubbed Odyssey, is cancelled. In December 2022, Ybarra said the team working on it had doubled over the previous year, with plans to grow even further.

A source told IGN that Microsoft's gaming teams had already suffered significant cuts to marketing budgets before staff were told of the layoffs.

The cuts come after a recently held showcase in which Xbox previewed a number of upcoming exclusive games, such as MachineGames' Indiana Jones and the Great Circle, Obsidian's Avowed, Ninja Theory's Hellblade 2, and Oxide Games' Ara: History Untold. Last year, Sarah Bond was promoted to Xbox president and Matt Booty was promoted to president of game content and studios, in an Xbox leadership shakeup.

Layoffs are sweeping the video game industry, with a number of high-profile studios cutting staff or shutting down. In stark contrast to a year of blockbuster video game hits, one of the biggest ongoing industry trends in 2023 was the prevalence of mass layoffs, and they have continued into 2024. While actual figures are difficult to obtain, estimates suggest the number of workers laid off in games last year approached or exceeded 10,000, and 2024 isn't looking much better. A recent GDC survey of developers suggests one-third of all game developers were impacted by layoffs last year, either directly or by witnessing them happen at their company.

Developing…

Wesley is the UK News Editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.