Significant workforce changes are underway after Microsoft's $68.7 billion merger with Activision Blizzard just over three months ago.
Reports indicate that the tech giant is set to lay off 1,900 employees across its video game divisions.
Xbox Boss Phil Spencer Addresses Workforce Reductions
Following an Activision Blizzard Merger, Microsoft laid off 1,900 workers in its video game division as part of its plan to implement a "sustainable cost structure."
According to sources cited by IGN, an internal memo from Xbox boss Phil Spencer sheds light on the company's plans.
In the report, Spencer outlines Microsoft's commitment to supporting those affected during the transition, including severance benefits in line with local employment laws.
"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. Together, we've set priorities, identified areas of overlap, and ensured that we're all aligned on the best opportunities for growth," Spencer added in his statement.
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The Magnitude of Workforce Reductions
In the memo, Spencer discloses the challenging decision to trim approximately 1,900 roles from the gaming workforce, which originally comprised 22,000 individuals.
Acknowledging the contributions of those impacted, Spencer expresses gratitude for their role in the success of Activision Blizzard, ZeniMax, and the Xbox teams.
Investment in Growth Areas
Spencer highlights Microsoft's gratitude for the commitment of development teams but underscores the need to shift focus. The decision to reduce the gaming workforce aligns with a strategic move to invest in areas that will drive business growth.
With this, the Redmond giant aims to support its overarching strategy of making games accessible to a broader global audience.
Confidence in Team's Abilities
While acknowledging the moment's difficulty, Spencer expresses unwavering confidence in the team's ability to create compelling games, stories, and worlds that foster player connections. He believes that this will position Microsoft for future growth and innovation.
Post-Merger Developments
The workforce reductions come on the heels of Xbox's recent Developer Direct, where plans for 2024 were unveiled. The event showcased first-party titles, including Indiana Jones and The Great Circle, Avowed, and Senua's Saga: Hellblade II.
Despite the workforce changes, Microsoft remains committed to its development teams and ongoing initiatives, per Game Developer.
Navigating Through Transition
Spencer and the Gaming Leadership Team express their dedication to navigating the transition thoughtfully. The individuals impacted by the workforce reductions played huge roles in the success of various gaming entities and are encouraged to take pride in their accomplishments.
Before Activision Blizzard was absorbed by Microsoft, the gaming giant laid off employees from its eSports department in July 2023.
During that time, the company was also gearing up to make huge changes to its Overwatch League. The teams voted on the operating agreement. Those who failed to vote were slapped with a termination fee, costing a whopping $6 million.
Five months after this incident, Activision Blizzard CEO Bobby Kotick stepped down after serving the company for 32 years.
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