Microsoft Implements Layoffs of 1,900 Staff Following Activision Gaming Acquisition
Microsoft has initiated a workforce reduction, affecting 1,900 employees, constituting eight percent of its gaming division, subsequent to the completion of its high-profile acquisition of Activision Blizzard, the creator of popular titles such as "Call of Duty."
Phil Spencer, the head of Microsoft's gaming division, communicated in a memo to employees, as reported by The Verge, that the layoffs were a result of identifying synergies between Microsoft and Activision. He emphasized the joint commitment of both companies to establish a "sustainable cost structure" aimed at fostering the growth of the gaming business, which currently employs 22,000 people and encompasses the Xbox division.
Spencer outlined that collaborative efforts have been made to set priorities, pinpoint areas of overlap, and align on the best opportunities for growth within the combined entity.
Simultaneously with the workforce reduction, Mike Ybarra, the president of Blizzard, announced his departure from the company. Ybarra expressed the challenges of the day and redirected his energy and support towards those affected by the layoffs.
Microsoft's acquisition of Activision Blizzard, which was completed in January 2022, elevated Microsoft to the position of the world's third-largest gaming company by revenue. The acquisition underwent rigorous scrutiny from regulators, including in the United States. Despite initial concerns and resistance, the deal eventually secured approval.
The layoffs come amid a broader trend of significant staff cuts in the tech industry that commenced in late 2022 and has continued into early 2024.