Microsoft will lay off 1,900 employees at Activision Blizzard and Xbox, the latest tech company to announce cuts so far in 2024.
The layoffs represent about an 8% cut of its video gaming staff of 22,000 workers and come months after Microsoft acquired Activision in a blockbuster deal. The $69 billion transaction in October represented one of the largest tech deals in history as Microsoft took over the studios behind bestselling games like Call of Duty, Diablo and Overwatch for its Xbox console.
The planned cuts are part of a larger “execution plan” that would reduce “areas of overlap,” Microsoft Gaming CEO Phil Spencer wrote in an internal memo, which was quoted in multiple news reports.
"We are grateful for all of the creativity, passion and dedication they have brought to our games, our players and our colleagues," Spencer is quoted as saying in the memo. "We will provide our full support to those who are impacted during the transition."
Microsoft confirmed news of the layoffs when reached Thursday by USA TODAY but declined to provide a copy of the memo.
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Microsoft's acquisition of Activision Blizzard was seen as a strategy to keep pace with Sony and Nintendo in a console race by adding more games to its multi-game subscription service and cloud gaming libraries.
Microsoft’s Xbox gaming console, which ranks third in sales behind PlayStation and Nintendo, seeks to fold Activision titles into its Game Pass service, which isn't unlike Netflix but for video games.
The Wall Street Journal reported that the planned cuts, which mostly target Activision Blizzard employees, reflect "redundancies" after the October acquisition of video game company. Spencer said in the cited memo that Microsoft would provide location-dependent severance to all laid-off employees.
Alongside the layoffs, two Blizzard Entertainment executives are leaving the company, President Mike Ybarra and design chief Allen Adham, a Microsoft spokesman told multiple outlets.
Ybarra confirmed the news himself of his immediate departure in a post Thursday on social media platform X.
"Leading Blizzard through an incredible time and being part of the team, shaping it for the future ahead, was an absolute honor," Ybarra said in the post.
Several big-name companies have already announced 2024 job cuts, including Amazon, eBay and Google. It remains to be seen whether this year will play out like 2023, which yielded more than 300,000 layoffs, according to Forbes, which tracks major announcements.
In the tech sector, at least, job cuts are fewer this year than last. Another layoff tracking site, Layoffs.fyi, reports that 76 tech companies had announced 21,370 layoffs through late January. By contrast, 277 firms had laid off 89,709 workers through January 2023.
But some economists foresee more layoffs to come, amid talk of a possible economic slowdown later in 2024.