Microsoft cuts 1,900 staff at Xbox, Bethesda and Activision Blizzard

Microsoft is cutting 1,900 staff across the Xbox, Bethesda and Activision Blizzard teams as the latest in a wave of layoffs across the game industry.

On top of that, Blizzard’s president Mike Ybarra and its chief design officer Allen Adham — the cofounder of Blizzard — are leaving the studio. And Blizzard’s survival game is no longer in development. The moves are the first major cuts in the wake of the $68.7 billion acquisition of Activision Blizzard in October. It also comes after a leadership reorganization to deal with the new company structure.

The cuts are the latest in a series of brutal layoffs that saw more than 11,000 job cuts in the game industry in 2023 and at least 3,500 so far this year. In 2024, we are now halfway to the 11,000 game layoffs of 2023 — in just the first 25 days of the year.

“I also want to let you all know today is my last day at Blizzard,” said Ybarra, who spent more than 20 years at Microsoft. “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-plus 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.”

In a memo to staff, Phil Spencer, head of gaming at Microsoft, said the company had to make a “painful decision” to cut the 1,900 jobs.

“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 said.

He added, “The gaming leadership team and I are committed to navigating this process as thoughtfully as possible. The people who are directly impacted by these reductions have all played an important part in the success of Activision Blizzard, ZeniMax and the Xbox teams, and they should be proud of everything they’ve accomplished here.”

He said, “We are grateful for all of the creativity, passion and dedication they have brought to our games, our players and our colleagues. We will provide our full support to those who are impacted during the transition, including severance benefits informed by local employment laws. Those whose roles will be impacted will be notified, and we ask that you please treat your departing colleagues with the respect and compassion that is consistent with our values.”

He said Microsoft will continue to invest in areas that will grow the business and support the strategy of bringing more games to more players around the world.

“Although this is a difficult moment for our team, I’m as confident as ever in your ability to create and nurture the games, stories and worlds that bring players together, Spencer said.

The Verge reported that Matt Booty, game content and studios president at Microsoft, issued a memo that announced the layoffs and departures.

“As many of you know, Mike previously spent more than 20 years at Microsoft. Now that he has seen the acquisition through as Blizzard’s president, he has decided to leave the company,” Booty said.

Microsoft is expected to announce a new Blizzard president by next week. Booty also praised Adham for his contributions.

“As one of Blizzard’s cofounders, Allen has had a broad impact on all of Blizzard’s games,” Booty said. “His influence will be felt for years to come, both directly and indirectly as Allen plans to continue mentoring young designers across the industry.”

The studio announced its survival game in January 2022, but now it has been canceled and Booty said Microsoft would shift people to work on several promising new projects in early development at Blizzard.

Overall, Microsoft is cutting about 8% of its gaming division, which has 22,000 employees.