Microsoft’s video gaming business fires 1,900 employees

Following a $69 billion (£54.3 billion) merger transaction, Microsoft’s gaming sector will lay off around 2,000 employees.

According to a statement sent by Xbox CEO Phil Spencer to employees, the business intends to let go of 1,900 of its 22,000 employees.

Three months after the software behemoth purchased Activision-Blizzard—the company behind the popular Call of Duty and Warcraft series—it was sent.

According to Mr. Spencer, firing employees was a “painful decision” in the letter, which Microsoft has confirmed is authentic.

The notice, which was first made public by the tech website The Verge, implies that employees of publisher Zenimax, which is in charge of companies like Bethesda and Arkane, as well as the Xbox division will also be impacted.

Microsoft has been contacted by BBC Newsbeat to inquire about the number of workers in each company that may be impacted.

Head of Microsoft Studios Matt Booty wrote a second letter to Blizzard employees, which was also leaked by the Verge and confirmed by Microsoft.

Meetings with the impacted employees will occur throughout the day, he added, and employees outside of North America would be notified thereafter.

The statement that the business “would provide our full support… including severance benefits informed by local employment laws” was similar to that of Mr. Spencer.

It also verified that Odyssey, a widely-known survival game project, was no longer being developed.

Following a string of legal disputes with authorities, Microsoft ultimately acquired Activision-Blizzard and Candy Crush developer King in September.

Activision CEO Bobby Kotick departed the firm after the transaction closed, and he was not immediately replaced.

Additionally, a top official at the firm announced his departure following the most recent revelations.

Former Microsoft employee Mike Ybarra, the head of Blizzard, said in a statement that he would no longer be the company’s “biggest fan from the outside” and that it had been “an honor” to guide it through an amazing period.

Several layoffs have already occurred in the video game business this year, after several redundancy announcements in 2023.

Riot Games, the company behind League of Legends, stated earlier this week that it was laying off 11% of its employees worldwide.

It came after 500 layoffs at Twitch, an Amazon-owned streaming network, 1,800 job losses at gaming engine company Unity, and rounds of layoffs at smaller companies.

Although the actual figure is believed to be higher, estimates place the overall number of jobs lost in the gaming business last year at over 10,000.

Experts surmise that the tendency has been mostly influenced by the cost-of-living problem and the gaming industry’s retreat following a surge from the Covid epidemic.

Large layoffs were also seen in the broader IT industry. Microsoft alone announced 10,000 layoffs in January of last year, with personnel cuts also occurring at Amazon, Meta, and other companies.

Microsoft has been contacted by the BBC to provide further information on the layoffs in its games sector.

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