Microsoft is set to reduce its workforce in the gaming unit, which will affect 1,900 employees, constituting around 9% of the gaming-related staff.
This move follows Microsoft’s recent completion of the $69 billion acquisition of Activision Blizzard, marking the company’s largest-ever acquisition.
The layoffs impact employees from the Activision Blizzard, ZeniMax, and Xbox teams. Microsoft Gaming Chief Phil Spencer expressed a commitment to aligning a strategy and execution plan with a sustainable cost structure to support the overall business.
The company acknowledges areas of overlap and emphasizes focusing on growth opportunities. Leadership changes at Blizzard include the departure of Mike Ybarra and Allen Adham.
“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,” Microsoft Gaming chief Phil Spencer wrote in a memo to employees.
“Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best growth opportunities, Spencer added.
The broader tech industry has witnessed workforce reductions, with several companies, including Amazon, eBay, SAP, Riot Games, Unity, Discord, and Twitch, announcing layoffs.
After a period of steady growth, Microsoft has shed over 16,000 jobs in the first nine months of 2023, exceeding the 10,000 job cuts announced in January 2023. Microsoft is set to announce its quarterly earnings on January 30, 2024.
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