We haven’t even made it an entire month into 2024 and yet we’ve already seen a staggering amount of layoffs across the gaming industry, with some people predicting that it will only get worse as the videogame bubble caused during Covid 19 bursts.
Microsoft has confirmed that it plans to lay off 1900 people across its gaming divisions. According to Video Game Layoffs which attempts to track the numbers, over 5,600 people will have lost their jobs already in just the first month of 2024, which is half of the total seen across the entirety of 2023.
Microsoft themselves confirmed plans to cut 8% of its 22,000-strong workforce across Activision Blizzard, Zenimax and Xbox.
IGN managed to obtain an internal Email sent by Xbox boss Phil Spencer where he addressed the coming layoffs.
“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.”
Phil Spencer, leaked internal Xbox memo
Sadly, this is fairly common when an entity acquires another company as they almost immediately set about clearing house. Microsoft completed its $69 billion deal to buy Activision Blizzard just months ago, and I have no doubt that people across Xbox and Activision Blizzard probably had a feeling cuts would be coming.
But it’s still a tough pill to swallow, especially when companies continue to post massive profits. Microsoft is a company of vast resources, easily capable of sustaining a large workforce. However, the lay-offs are par for the course and as harsh as it may seem, pretty standard business practice. As projects come and go, the number of employees needed ebbs and flows and from a company viewpoint, it doesn’t make sense to keep a bunch of extra people on the payroll if they aren’t needed.
However, that doesn’t stop it from feeling unfair and callous, nor does it excuse the fact that the upper management typically brings on obscene salaries and rarely ever has to face the chopping block for their poor decisions which resulted in people having to lose their jobs.
Along with the news of 1,900 being fired came the surprising announcement that Mike Ybarra, the head of Blizzard, is also leaving.
I want to thank everyone who is impacted today for their meaningful contributions to their teams, to Blizzard, and to players’ lives. It’s an incredibly hard day and my energy and support will be focused on all those amazing individuals impacted – this is in no way a reflection…
— Mike Ybarra 🎄 (@Qwik) January 25, 2024
“To the Blizzard community: I also want to let you all know today is my last day at Blizzard.” wrote Ybarra on X. “Leading Blizzard through an incredible time and being part of the team, shaping it for the future ahead, was an absolute honor. 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.”
Jason Schrier of Bloomberg seems to believe that Ybarra was forced out. In a post on X, Schrier said that an internal memo from Matt Booty indicated Ybarra chose to leave, but when Schrier met Ybarra in November at Blizzcon, Ybarra said “he wanted to stay for the long haul” and that “Someone will drag me out of Blizzard. That’s how long I will be here.”
Allen Adham, Blizzard’s chief design officer, also left the company.
It was also revealed that Blizzard’s in-development survival game has been canned. The internal memo said “Blizzard is ending development on its survival game project and will be shifting some of the people working on it to one of several promising new projects Blizzard has in the early stages of development. “
Little was known about the project except that it was codenamed Odyssey and had seemingly been in development for 6 years. With no official announcement ever having been made, it seems somewhat safe to assume that the project was struggling to find its footing, which may be why Microsoft chose to cancel it entirely.
These mass layoffs may also have something to do with something Jez Corden of Windows Central said today. Jez has typically reliable sources, and he claims that Microsoft has shut down its physical games division for Xbox, which could account for at least some of the layoffs.
“Microsoft has also shut down departments dedicated to bringing Xbox games to physical retail … which if you’ve seen the digital-only Xbox console leaks … well, you can get an idea of where Microsoft is going here.” wrote Jez on X.