According to a new report from IGN, new Microsoft layoffs will cut 1,900 employees from its video game workforce.
Microsoft announced the layoffs in an official memo from Phil Spencer. IGN was provided with the full memo, which includes some careful elaboration.
Spencer explains that Microsoft Gaming and Activision Blizzard are interested in “an execution plan with a sustainable cost structure, that will support the whole of our growing business”.
Spencer also mentions that “we’ve set priorities, identified areas of overlap”. This might signal which roles are affected by the layoffs.
However, Spencer also states the companies will provide “full support to those who are impacted during the transition, including severance benefits”.
Spencer’s memo compares the 1,900 layoffs to the total workforce of 22,000, but it is still a notable reduction.
Since the Microsoft memo specifically mentions overlap, the layoffs may not affect too many titles in development.
However, Microsoft has already cancelled Activision Blizzard’s upcoming survival game.
So, fans should keep a watchful eye on other various titles in development at Blizzard. Microsoft could cancel or delay even more games.
But Spencer’s memo does mention that Microsoft will “continue to invest in areas that will grow our business”. There may also be some new announcements incoming.
According to a new tweet from reporter Jason Schreier, Activision Blizzard’s “Mike Ybarra is also out”. The thread adds that chief design officer Allen Adham is leaving Blizzard.
Layoffs have hit a variety of studios this month. Black Forest Games, the developer behind the upcoming TMNT: The Last Ronin adaptation, faced new layoffs just yesterday.
The layoffs affected around 50% of the total employees, a major shakeup that will likely affect development.
If you want to read Phil Spencer’s full memo to the company, you can do so below:
“It’s been a little over three months since the Activision, Blizzard, and King teams joined Microsoft. 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.
“As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1,900 roles out of the 22,000 people on our team. 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. 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.
“Looking ahead, we’ll continue to invest in areas that will grow our business and support our 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.
An email from Activision President reads,
“Team, Each time I come before the group, my hope is to celebrate our wins together, share how we are supporting our people, highlight the great work you all do for our games and players, and talk about what we need to do together to continue to drive our business forward.
“However, as you have seen in Phil’s note, we have a difficult message to deliver on the last point. Across AP, we have made organizational changes to reset and re-align our resources for the future. As a result, some of our colleagues will be leaving the company. There are also changes to roles across Activision Blizzard, Blizzard, people who support King, and Microsoft Gaming. Leaders of those groups will address those changes.
“We recognize that news like this is very hard to process. This decision was not made lightly and is in no way a reflection of the passion, commitment, or support that our impacted colleagues have provided to our business. Change is never easy, especially when it means saying goodbye to colleagues, teammates, and friends. Thank you to the incredibly talented team members who have made exceptional contributions to serving our players around the world.
“We are supporting those impacted during this transition with extended healthcare, severance pay, bonuses, job transition support, and more for U.S. employees, and for non-U.S. employees support will be consistent with local rules and regulations. You will receive an invite from your team leader to further discuss how we will work through these changes.
“Today is a tough day. I deeply appreciate all of you as we go through this transition.
For more of the latest gaming industry news, you can read about Sledgehammer Games going remote as it relocates to a smaller office.