Taking the fun out of gaming, announcements about Microsoft layoff plans are now making the rounds, with the company narrowing down on their Xbox, ZeniMax, and Activision Blizzard employees this time. According to reports, Microsoft is planning to lay off 1900 employees from its 22,000-strong gaming workforce to better align themselves with their strategy to support their growing business. After more than a year of negotiations, Microsoft’s acquisition of Activision Blizzard was finally completed in October last year, with a $68.7 billion deal to seal the agreement. Ever since then, there has been considerable uncertainty over whether the full force of the team would be retained or if layoffs would ensue to balance out the forces. The news of the Activision Blizzard layoffs finally answers the question.
Microsoft Layoffs Move Ahead as Tech Industry Continues to Rearrange its Workforce
The Microsoft layoffs are all set to affect 8 percent of the Microsoft Gaming division in total while the rest of the organization remains unaffected so far. The Verge obtained an internal memo that was sent out to employees by Microsoft Gaming CEO Phil Spencer, informing the team about the decision to cut down on the team. The memo promised that affected employees would be informed about the update soon and also made a note of the provision of severance benefits but did not elaborate further on what that would include, other than that they would be in accordance with local employment laws. The last big round of layoffs at Microsoft took place around the same time last year, with 10000 workers being affected, mainly from sales and marketing.
During the previous series of Microsoft layoffs, employees were offered “above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, career transition services, and 60 days notice prior to termination,” but it is unclear if the same benefits will be offered this time around. Many speculate that the layoffs could be a result of internal Microsoft AI developments that are making many job roles redundant but in this particular instance, there is nothing to indicate that this is the case. Still, caution appears to be the way forward considering the pace of AI developments that could perhaps overtake the overall benefits of a regular workforce
Results of Microsoft’s Acquisition of Activision Blizzard
The Microsoft layoffs are just one angle to the news we have about the major shakeups at the organization. Microsoft’s acquisition of Activision Blizzard has led to multiple conversations of how this might affect the gaming industry but so far, the changes have been largely internal. Blizzard president Mike Ybarra also chose to leave the company recently. He confirmed his move out of the company with an X/Twitter post stating “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.” The reactions from employees and customers have been quite similar, expressing their disappointment at the news. Blizzard’s Chief Design Officer and cofounder Allen Adham has also reportedly moved out of the organization.
I want to thank everyone who is impacted today for their meaningful contributions to their teams, to Blizzard, and to players’ lives. It’s an incredibly hard day and my energy and support will be focused on all those amazing individuals impacted – this is in no way a reflection…
— Mike Ybarra 🎄 (@Qwik) January 25, 2024
Leadership changes leave quite an impact on an organization, especially when there are already signs of unrest among its workforce, so Microsoft might have to work extra hard at setting things right with the workforce it is planning to retain. The company is also closing its work on the Blizzard survival game that has been in the works for over six years, moving employees to other active projects, so this is quite certainly a time for change with the Microsoft teams.
The job market remains unstable one month into 2024 and while workers have hoped that the trend of layoffs will slow down this year, it doesn’t seem likely so far. With Discord, Amazon, Google, Unity, GM Cruise, Twitch, and other popular names already pursuing layoffs this year, it doesn’t appear to be the best time for job seekers currently looking for employment, regardless of the industry.