Microsoft lays off nearly 2,000 employees, cancels upcoming Blizzard game

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The first substantial fallout of the Microsoft-Activision Blizzard merger has arrived. Microsoft has let go 1,900 of its employees across Zenimax, Xbox, and Activision Blizzard, with the majority of the layoffs affecting the latter. Amidst this, Blizzard's current president, Mike Ybarra, is stepping down from his role at the company, as well as Blizzard co-founder Allan Adham.

Xbox's CEO Phil Spencer explained the reasoning for the massive layoffs in an email to staff (courtesy of The Verge).

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 1900 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.

However, it appears that the employees who were let go from the company were not well informed as to who lost their job and who got to stay, as notable journalist Jason Schreier commented that those within Xbox were not directly told, and had to wait to be notified as to whether or not they were still employed by Microsoft. These firings represent 8% of Microsoft's gaming divisions across the board.

Also affected by this was one of Blizzard's upcoming titles, which was originally announced in 2022. It was set to be a survival game, and had been in development for over six years. Now, the game is canceled, and a majority of the team working on the title have been fired, with the remainder being moved to other Blizzard projects.

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