Microsoft this week laid off approximately 1,900 employees, representing about 8% of its Gaming division staff. The job cuts impact teams at recently acquired Activision Blizzard and some at Xbox and ZeniMax as Microsoft looks to align and integrate operations.
In an internal memo, Microsoft Gaming chief Phil Spencer said the company is committed to building a sustainable cost structure to support future gaming growth. The layoffs were described as a “difficult but necessary decision” to eliminate redundancy and invest in key strategic areas. Employees affected will receive severance and transition support.
Leadership changes are also underway. Blizzard’s president, Mike Ybarra, is departing after overseeing the merger transition. Blizzard’s chief design officer, Allen Adham, a company co-founder, is also leaving but will continue advising industry designers.
The restructuring comes amid various economic challenges pressuring the tech/gaming industry. Microsoft finalized its $68.7B Activision acquisition in October after prolonged regulatory reviews. Leadership seeks to better align Activision and Xbox operations under the Microsoft Gaming umbrella.
Next week Microsoft reports earnings covering the first full quarter post-merger. The company last conducted major job cuts about a year ago, which terminated 10,000 positions. This week’s layoffs indicate an ongoing focus on efficiency even after big investments to expand Microsoft’s gaming lineup and reach.
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