Tech Giant Microsoft is set to lay off 1,900 employees, constituting eight percent of its gaming division staff, as part of the consolidation process after acquiring gaming giant Activision Blizzard. The announcement was made by Phil Spencer, the head of Microsoft’s gaming division, who highlighted the identification of synergies between the two companies as the reason behind the cuts.
Spencer emphasized the commitment of Microsoft and Activision to establishing a sustainable cost structure for the gaming business, which currently employs 22,000 people and includes the prominent Xbox division.
In a memo to employees, he mentioned, “Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth.”
In tandem with the layoffs, Blizzard president Mike Ybarra announced his departure from the company, expressing solidarity with those affected.
The move comes as Microsoft finalizes its blockbuster takeover initiated in January 2022, securing its position as the world’s third-largest gaming company by revenue.
The acquisition faced regulatory scrutiny, with concerns initially raised by Britain’s regulator over potential competition issues in the burgeoning cloud gaming sector.
Despite obstacles, the transaction prevailed, allowing Microsoft to strengthen its foothold in the gaming industry.
The layoffs add to the ongoing trend of significant staff cuts observed across various Big Tech companies, a phenomenon that commenced in late 2022 and continues into early 2024.
