As first reported by The Verge, Microsoft's Gaming Division is undergoing a significant restructuring, resulting in the layoffs of 1,900 employees. The impact extends to both recently acquired Activision Blizzard and the Xbox team.
The Verge, citing an internal memo from Microsoft Gaming CEO Phil Spencer, reports that this amounts to around 8% of the total Microsoft Gaming workforce comprising of approximately 22,000 individuals.
Activision Blizzard logo displayed on a laptop screen and Microsoft logo displayed on a phone screen are seen this illustration photo taken in Krakow, Poland on January 18, 2022.
Microsoft's Gaming Division Gets Major Overhaul
This move comes just over three months after Microsoft completed its massive $68.7 billion acquisition of Activision Blizzard in October.
The memo obtained by The Verge reveals leadership's commitment to aligning a strategy with a sustainable cost structure, emphasizing the importance of supporting the growing business.
The internal memo also stated that the company will provide full support to those affected during the transition, including severance benefits in accordance with local employment laws.
Blizzard President Mike Ybarra, a key figure in the company, has opted to leave amidst the restructuring. Blizzard's Chief Design Officer, Allen Adham, is also parting ways with the company.
"Leading Blizzard through an incredible time and being part of the team, shaping it for the future ahead, was an absolute honor. 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," Ybarra said in a message to the community posted on X.
The Verge tells us that the departure of these key figures prompts Microsoft to announce plans for a new Blizzard president next week. In addition to the personnel changes, a Blizzard survival game has been axed, with resources redirected to promising new projects in early development.
Read Also: eBay Unveils Major Workforce Overhaul as CEO Announces 9% Layoffs
Industry-Wide Layoffs
This move follows a broader trend in the tech industry, with other major firms like Alphabet, eBay, Riot Games, and Amazon's Twitch announcing job cuts. The widespread layoffs persist into 2024, echoing the challenges various tech giants face.
While this is not the first time Microsoft has implemented substantial layoffs, with a significant round affecting 10,000 employees a year ago, the current restructuring is a strategic response to the evolving landscape following the Activision Blizzard acquisition.
With Microsoft due to report its fiscal Q2 2024 earnings next week, analysts eagerly anticipate insights into the financial impact of the Activision Blizzard acquisition.
In Other News
Hewlett Packard Enterprise (HPE) recently disclosed that it was the victim of a cyber attack orchestrated by a hacking group linked to Russian intelligence.
The breach, as revealed in a Securities and Exchange Commission filing, has been linked to the notorious threat actor Midnight Blizzard, also known as Cozy Bear.
This same group was responsible for recent breaches at Microsoft, targeting the email accounts of senior executives and the high-profile SolarWinds attacks affecting various government entities.
Stay posted here at Tech Times.
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