Microsoft lays off 1,900 Activision Blizzard and Xbox employees amid industry-wide cuts

Photo of one of Blizzard's studio signs. Blizzard was acquired by Activision in '08, and Activision Blizzard was acquired by Microsoft in Oct. 2023.
Photo of one of Blizzard's studio signs. Blizzard was acquired by Activision in '08, and Activision Blizzard was acquired by Microsoft in Oct. 2023. (Image credit: Defkey on Wikipedia)

Microsoft closed its Activision Blizzard acquisition in October 2023, and now it is firing 1,900 employees from Activision Blizzard, Xbox, and ZeniMax. According to The Verge, the former is feeling the brunt of the layoffs. Current Blizzard president Mike Ybarra, whose role was to oversee the acquisition, resigned separately alongside Blizzard cofounder and chief design officer Allen Adham.

According to an internal memo from Phil Spencer, employees impacted by these layoffs will be directly notified and provided severance packages when leaving. If they're lucky, these packages will be akin to or better than Riot Games' generous six-month severance, especially considering the $69 billion cost of Microsoft's acquisition. However, the scale of the severance package isn't disclosed in the memo; the only information is the number of employees being laid off.

In the wider gaming industry, these layoffs align with similar layoff trends from the likes of Amazon Games, Ubisoft, and other studios. Even Intel laid off over 700 employees in 2023 among general PC hardware companies. These layoffs are occurring despite record revenues for all forms of gaming hardware.

Unfortunately, many of these game studios seem to adhere to an unsustainable model of perpetual growth. This model drives unsavory in-game monetization schemes and pushes cyclical mass layoffs in the gaming industry.

Developers blame different things for this most recent wave of layoffs. However, according to an October 2023 GDC survey referenced by Wired, overhiring during COVID-19 is considered one of the leading causes. The increasing adoption of tools like generative AI within game development may also contribute to reducing labor in the field. However, the most heavily impacted role by layoffs seems to be QA testers rather than core developers.

As always, it's unfortunate but not unexpected to see mass layoffs from players operating at this scale within this industry. Hopefully, the increasingly unionized gaming industry will start moving more favorably toward its long-term employees than its current state of constant studio/IP acquisitions and closures.

  • USAFRet
    As I've heard from one than one source, this is industry wide, and mostly a correction after over-hiring during the pandemic.
    Reply
  • atomicWAR
    Not surprised, as USAFRet pointed out this has been industry wide. We've seen studios shuttered, more games than usual canceled late in development, studio buyouts followed by layoffs, etc. Plus what I've heard muttering from friends in the industry that also supports this conclusion as well with some of those gearing up back burner plans/projects just in case their job/studio is next.

    The pandemic created a lot of demand in the gaming sector with everyone staying home yet still wanting to have a bit of fun and/or socialization. Studios jumped on it cranking out content faster than ever. But part of the problem beyond growing budgets and subsription models taking off(ish) is that over abundance of content. Heck my back catalog of games I have started and am wholly intent on completing yet haven't had time to do so...is embrassingly large. And don't get me going on the ones I started, ended up not liking but passed the two hour return window in play time because they started OK but never fully engaged me and I got bored.

    With the number of 'good' and 'bad' games that launch increasing exponentially every year, it is basically impossible these days to play all the games you might be interested in. End of day the industry is eating itself from over production, skyrocketing budgets (inflation isn't helping) and subscription models taking off. Something had to give... Hopefully when the dust settles gaming as a whole will be better for it though I suspect things will get worse in the industry before they get better.
    Reply
  • stonecarver
    Welp when I first learned Microsoft was buying up the gaming studios I got a pit in my stomach. And here we are.

    Buy, hold , cut the fat, and distroy.

    Make sure you have a legit reason to say why you cut the fat and that's how corperate world works. Just another day in the neighborhood. :confused_old:
    Reply
  • JTWrenn
    10% workforce reduction after a purchase is very common. There are always overlaps in the workforce and projects that get shut down. The way they are doing it actually sounds pretty good compared to how other companies have done it...at least the lip service sounds more real. Never a fun thing, but very common.
    Reply
  • Eximo
    They should all band together and create PassiveVision / SummerBreeze
    Reply
  • Sleepy_Hollowed
    USAFRet said:
    As I've heard from one than one source, this is industry wide, and mostly a correction after over-hiring during the pandemic.
    Not even a bit.

    This is short term stock pumping or the effects of conglomeration.

    Their merger should’ve not been permitted if this was the outcome, and more to come.

    When a company has to have infinite stock rise for the investors to be happy, it’s not doing well.
    Reply
  • Amdlova
    With the latest fiascos from blizzard :) 10% it's nothing...
    Reply
  • ThomasKinsley
    Unfortunately, many of these game studios seem to adhere to an unsustainable model of perpetual growth. This model drives unsavory in-game monetization schemes and pushes cyclical mass layoffs in the gaming industry.
    My gaming days are over, but I remember about 20 years ago Ubisoft had a game with ostentatious in-game posters advertising various products, and one of their staff members openly bragged about it saying the concept was "free money" with the more ads the better. It sounds like the industry hasn't changed one bit. I'm glad I'm over it.
    Reply
  • epobirs
    The layoffs at Activision and other parts of that acquisition were to be expected, as those positions are redundant as the company restructures as a part of a larger entity rather than a company unto itself. This will be more felt among the business infrastructure personnel like accountants than the actual developers.
    Reply
  • bit_user
    atomicWAR said:
    End of day the industry is eating itself from over production, skyrocketing budgets (inflation isn't helping) and subscription models taking off. Something had to give...
    I feel like this isn't just video games, but all sorts of content. There are so many shows getting produced and I wonder who has time to watch any of them.
    Reply