Microsoft's gaming layoffs, predominantly impacting subsidiary studios, have raised concern. Toys for Bob, known for Skylanders, faces 86 job cuts, while Sledgehammer Games, behind Call of Duty: Vanguard, will cut 76 positions. 

(Photo : Matthew Manuel from Unsplash)

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."

Affecting 86 Jobs at Skylanders Studio Toys for Bob

Microsoft's recent gaming industry layoffs have triggered significant concern, particularly with the revelation that subsidiary studios are bearing the brunt of the cuts, as reported by Engadget.

Among those affected are Toys for Bob, renowned for their work on the Skylanders series, facing 86 job losses, and Sledgehammer Games, responsible for Call of Duty: Vanguard, with 76 positions being cut. 

Microsoft's recent layoffs are impacting 162 employees in Novato and Foster City. Novato-based Toys for Bob, known for creating Skylanders, faces closure, while Foster City's Sledgehammer Games, a subsidiary of Activision, is also affected. 

Sledgehammer Games is temporarily closing its office, transitioning employees to remote work. Established in 2009, the company is renowned for its contributions to the Call of Duty franchise, while Toys for Bob gained recognition for creating the Skylanders series, introducing the toys-to-life concept.

The layoffs extended to Blizzard's customer service team and departments handling physical Xbox games for retail. This restructuring is purportedly a cost-saving measure by Microsoft, which recently became the second company to reach a $3 trillion market value amidst the layoffs.

Aftermath of Microsoft's Acquisition of Activision Blizzard

The layoffs come in the aftermath of Microsoft's acquisition of Activision Blizzard, raising eyebrows at the Federal Trade Commission (FTC). Game Rant reported that this emerged through California WARN notices, a legal requirement mandating companies to notify the state of upcoming job reductions. 

Notably, Toys for Bob's office closure adds another layer to the impact, signaling significant changes within the gaming industry landscape. Renowned for projects like Spyro the Dragon, Skylanders, and Crash Bandicoot 4, the studio will cut around 35 jobs.

Similarly, 76 employees at Activision Blizzard, located in San Mateo, CA, will be affected, matching the headquarters of Sledgehammer Games. Insider Gaming reported earlier that Sledgehammer Games would transition to fully remote operations, closing its physical offices.

In January, Microsoft announced a substantial reduction in its workforce, affecting around 1,900 employees across its Xbox, Activision Blizzard, and ZeniMax (Bethesda) divisions. 

This move attracted the attention of the FTC, which filed a complaint alleging that these layoffs contradicted Microsoft's earlier statements. 

The FTC sought to temporarily halt Microsoft's acquisition of Activision Blizzard, a deal that had previously received approval from the UK's Competition and Markets Authority in October.

Also Read: Microsoft's 'Halo' Support Continues Despite Layoffs, Xbox Boss Phil Spencer Assures

The gaming industry has witnessed a wave of layoffs, with approximately 10,500 job losses reported in 2023. The trend continued into 2024, with over 6,000 more layoffs recorded within the first month of the year. 

These layoffs reflect broader challenges within the tech sector, contributing to concerns about employment stability and industry dynamics.

Related Article: Microsoft Cuts 1,900 People Across its Video Game Divisions in Recent Layoff Following Activision Blizzard Merger