Microsoft is laying off 1,900 employees in its gaming division, a move that comes just over three months after the tech giant finalized its $69 billion acquisition of Activision Blizzard. The cuts affect employees across Xbox, ZeniMax, and Blizzard Entertainment, and arrive during what industry watchers are calling a brutal year for gaming professionals.
According to a memo obtained by CNBC, Microsoft Gaming CEO Phil Spencer confirmed the decision was made to minimize “areas of overlap” following the massive acquisition. “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,” Spencer wrote.
Leadership Changes at Blizzard
The announcement also comes alongside significant leadership departures. Mike Ybarra, president of Blizzard Entertainment since 2022, announced his resignation, stating on X (formerly Twitter) that it was “an incredibly hard day.” He thanked those impacted by the cuts for their contributions and added, “this is in no way a reflection on your amazing work.”
“Today is my last day at Blizzard,” Ybarra wrote. “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.”
Blizzard co-founder and chief design officer Allen Adham is also departing, according to an internal memo from Matt Booty, Microsoft’s president of game content and studios. Booty stated that Blizzard’s new president will be announced next week.
“Painful” Layoffs After Record-Breaking Acquisition
While the Microsoft-Activision Blizzard deal is one of the largest in video game history, the integration of teams has led to job redundancy. Spencer described the layoffs as “painful” but necessary for long-term strategy.
“This is a difficult process, but it is one that will best enable Blizzard and Xbox to deliver ambitious games for our players on more platforms and in more places than ever before,” said Matt Booty in his internal message.
Spencer emphasized the company’s intent to “invest in areas that will grow our business” and bring more games to players worldwide. He reaffirmed confidence in Microsoft’s gaming teams and their ability to deliver immersive experiences despite the current setbacks.
Broader Industry Impact
Microsoft’s move reflects a broader trend in the gaming industry. According to estimates by gaming news site Kotaku, more than 5,800 jobs were cut this month alone across various companies. Key industry layoffs include:
- Riot Games (League of Legends, Valorant): 530 jobs cut
- Twitch (owned by Amazon): 500 layoffs
- Discord: 17% workforce reduction (~170 jobs)
In total, more than 6,500 gaming jobs were lost in the past year, with some trackers suggesting the real number could be even higher. The industry has been hit by rising production costs, project cancellations, and post-pandemic normalization of digital entertainment consumption.
What’s Next for Microsoft Gaming?
Despite the layoffs, Microsoft remains committed to expanding its gaming footprint. The company is focused on cross-platform growth and leveraging its recently acquired IP, including Call of Duty, World of Warcraft, Spyro, and Crash Bandicoot, to strengthen Xbox Game Pass and cloud-based gaming initiatives.
The announcement of Blizzard’s new leadership next week will be a key step in realigning Microsoft’s creative and operational strategies.
Conclusion
The mass layoffs at Microsoft and across the gaming world highlight the fragile balance between blockbuster acquisitions and human cost. As tech giants consolidate IP and talent, questions remain about sustainability and job security within the ever-evolving video game industry.
Key Takeaways
- 1,900 layoffs confirmed in Microsoft’s gaming division
- Blizzard President Mike Ybarra and co-founder Allen Adham depart
- Layoffs follow Microsoft’s Activision Blizzard acquisition
- Gaming industry sheds over 6,500 jobs in the past year
- New Blizzard president to be announced next week
