As if 2023's historic volume of gaming layoffs wasn't enough, 2024 is starting in the exact same vein—studios including CI Games, Behaviour Interactive, and Riot Games have all let people go in January, and now it's Microsoft's turn. A message from Microsoft Gaming CEO Phil Spencer to employees (via The Verge) says 1,900 employees are being laid off.
The message reads: "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."
It emphasises "areas of overlap" as the root cause for the decision. "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."
President of Blizzard Mike Ybarra also announced that he would be stepping down from his position, writing on Twitter: "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 honour. 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."
However, Ybarra's has previously indicated a desire to stay with the company. According to Bloomberg's Jason Schreier on Twitter, Ybarra said in November 2023 that someone would "drag [him] out of Blizzard … That's how long I will be here." Whether he's simply changed his mind or whether his departure was prompted by the layoffs, it's hard to say.
The Verge report also states that Blizzard co-founder and chief design officer Allen Adham will be leaving the company. Microsoft's Matt Booty wrote: "As one of Blizzard’s cofounders, Allen has had a broad impact on all of Blizzard’s games. His influence will be felt for years to come, both directly and indirectly."
Booty also announced the end of Blizzard's survival game (rumoured to be named Odyssey) to staff: "Blizzard is ending development on its survival game project and will be shifting some of the people working on it to one of several promising new projects Blizzard has in the early stages of development."
The layoff of nearly 2,000 people represents the dark side of large acquisitions like this one. Often, major restructuring follows as the other shoe drops. While the memo points towards the "Activision Blizzard, ZeniMax and the Xbox teams", it's not clear how the layoffs have been weighted across Microsoft's gaming developers.
Spencer says the company will "provide our full support to those who are impacted during the transition, including severance benefits informed by local employment laws."
