Microsoft announces 1,900 layoffs within its “video game” divisions

Microsoft announced its desire to “reduce its video game workforce” in an email signed by Phil Spencer, the head of the company’s “gaming” division, and sent on January 25 to its employees

Microsoft announces 1,900 layoffs within its “video game” divisions

Microsoft announced its desire to “reduce its video game workforce” in an email signed by Phil Spencer, the head of the company’s “gaming” division, and sent on January 25 to its employees. This internal communication mentions the dismissal of nearly 1,900 of the company's 22,000 employees in its divisions dedicated to video games.

The email, revealed by the American specialist site The Verge and confirmed by Microsoft to Le Monde, indicates that the cuts concern all those responsible for the development and distribution of video games, namely Xbox Game Studios (Halo, Minecraft), ZeniMax Media (Skyrim, Doom) and, more recently, Activision Blizzard (Call of Duty, World of Warcraft, Candy Crush).

“The management of Microsoft Gaming and Activision Blizzard are working to align their strategies and action plans within a cost-sustainable structure that will support our entire growing business,” Mr. Spencer wrote, according to which “Redundant sectors” have been “identified” at Microsoft Gaming and Activision Blizzard, its newly acquired subsidiary.

The same day, Blizzard president Mike Ybarra also announced his departure from the company. He succeeded J. Allen Brack in 2021, who was fired due to employee complaints of harassment and discrimination.

The departure of another historic pillar of the company, Allen Adham, as well as the cessation of production of a survival game project (called Odyssey), were finally announced in a second internal email by Matt Booty, one of Microsoft's executives.

Waves of layoffs in video games

These announcements come just three months after the acquisition of American publisher Activision Blizzard was finalized for a record $69 billion. Microsoft had to wait almost two years before finalizing this acquisition, while American and British regulators, initially reluctant, gave the green light.

At the end of this takeover, the most expensive in the history of the video game industry, the Redmond firm had recovered the approximately 18,000 employees of the leading American video game publisher as well as its flagship licenses. Microsoft then significantly overhauled the organization chart of its video game divisions. The man who was the leader of Activision for more than three decades, the controversial and very powerful Bobby Kotick, had to leave his seat on December 29, 2023.

The video game sector has been experiencing mass layoffs for a year. According to the count carried out by the Game Industry Layoffs site, more than 10,000 people were left behind in 2023, including at heavyweights in the sector such as Electronic Arts (FIFA), Epic Games (Fortnite) or Nuverse (Marvel Snap).

The movement seems to be accelerating again at the start of the year, with, for the month of January alone, already more than 5,000 layoffs recorded: to those in Microsoft's "gaming" divisions are added the 1,800 positions eliminated at Unity (publisher of video game development tools) and the 500 layoffs announced at the beginning of the week by Riot Games (League of Legends).

Last year, Microsoft (and not just its “video game” subsidiaries) had already cut 10,000 jobs, like most tech giants – with the notable exception of Apple.