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Microsoft Is Laying Off 1900 Employees Across Xbox, Activision Blizzard, And ZeniMax

by Wesley LeBlanc on Jan 25, 2024 at 08:40 AM

Update, 2:50 p.m. ET/ 1/25/24:

The Verge obtained the full internal memo sent to staff by Microsoft's game content and studios president, Matt Booty. In it, he says, following today's layoffs, the company is moving forward with a more focused strategy across Microsoft Gaming that sets it up for sustainable growth and a better alignment of talent. Booty also addresses Blizzard president Mike Ybarra's departure, and the cancelation of its in-development survival game project. He says Blizzard's next president will be announced next week. 

You can read the memo, in full, below

"Blizzard team, 

As you may have read in Phil's note, today is a challenging day as we say goodbye to some of our colleagues. This is a difficult process, but it is one that will best enable Blizzard and Xbox to deliver ambitious games for our players on more platforms and in more places than ever before. We are moving forward with a more focused strategy across Microsoft Gaming that sets us up for sustainable growth and aligns our talent and resources to our top priorities. 

"In addition to the events today, Mike Ybarra and I have been discussing his future and some of his personal passions for some time. As many of you know, Mike previously spent more than 20 years at Microsoft. Now that he has seen the acquisition through as Blizzard's president, he has decided to leave the company. As we move forward, we will continue to build on the positive momentum that Mike created and strive to continue exceeding the expectations of Blizzard's players. I want to thank Mike for his leadership and for his partnership and counsel since the deal closed. I know he plans to travel and spend more time with his family. We wish him the very best.

"Additionally, Allen Adham, Blizzard's Chief Design Officer, is leaving the company. As one of Blizzard's cofounders, Allen has had a broad impact on all of Blizzard's games. His influence will be felt for years to come, both directly and indirectly as Allen plans to continue mentoring young designers across the industry.

"The new Blizzard President will be announced next week. 

"What Happens Next 

"Those who are impacted are being informed in meetings starting today. Given the challenging day ahead, anyone who is set up to work from home and would prefer to, can work remotely today. Due to time zones and local holidays, some impacted employees in APAC and EMEA will be informed later this evening and into early next week. After the notifications are complete, leaders will bring their teams together. Please be mindful of this process in your conversations and outreach during these next few days. 

"Details on Today’s Actions 

"The changes announced today reflect a focus on products and strategies that hold the most promise for Blizzard's future growth, as well as identified areas of overlap across Blizzard and Microsoft Gaming. Today's actions affect multiple teams within Blizzard, including development teams, shared service organizations and corporate functions. As part of this focus, 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. 

"No matter the reason behind these decisions, they are never made lightly. Changes like these affect the lives of colleagues and friends, and we are all grateful for their meaningful contributions to Blizzard and its world-class lineup of games. As Phil stated, we will provide our full support to those who are impacted during the transition, including severance benefits informed by local employment laws. 

"I understand that this is a challenging time and that it can be a lot to process. I haven't met many of you yet, and hearing about these decisions from me may be difficult. Today, I am here on Blizzard's Irvine campus, and I am personally committed to supporting you as teams and individuals, keeping you informed, and approaching this transition period with care and transparency. 

"Thank you for working through these changes with us. Together we will continue to create amazing games for our players, with a culture that empowers everyone to be their most authentic selves and do their best work."

The original story continues below...

Update, 9:51 a.m. ET, 1/25/24:

Blizzard president Mike Ybarra has announced he is departing from the company; he was not laid off as part of Microsoft's 1,900 job cuts across its various gaming divisions, but the timing suggests the layoffs and his decision to leave are at least tangentially related. Here's what Ybarra wrote on Twitter

"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 on your amazing work. If there's anything I can help with, connections, recommendations, etc., DM me.

"To the Blizzard community: I also want to let you all know today is my last day at Blizzard. 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.

"To the incredible teams at Blizzard - thank you. Words can't express how I feel about all of you. You are amazing. Continue to do incredible things and always keep Blizzard blue and the player at the forefront of every decision. To all of those impacted today - I am always available to you and understand how challenging today’s news is. My heart is with each one of you."

Ybarra has worked at Blizzard since 2019, first as executive vice president and general manager of platform and technology before becoming president of the company in 2021. Before that, he worked for Microsoft for more than 19 years in various positions like corporate vice president of Xbox Live and Game Pass and partner studio manager for Xbox Studios. 

Bloomberg reporter Jason Schreier is also reporting that Allen Adham, chief design officer and Blizzard founder is leaving the company following these layoffs, and that Odyssey, the studio's in-development survival game, has been canceled. 

The original story continues below...

Original story, 9:43 a.m. ET, 1/25/24:

Microsoft is laying off roughly 1,900 employees across its Xbox, Activision Blizzard, and ZeniMax teams. This news comes by way of IGN, which has learned from sources that Microsoft Gaming CEO Phil Spencer sent a memo to staff explaining the layoffs.

Spencer cites the need to align strategy with a sustainable cost structure. Notably, Microsoft spent $69 billion in October to acquire Call of Duty and Overwatch maker Activision Blizzard, and it spent $7.5 billion in 2020 to acquire ZeniMax Media

Here's Spencer's memo to staff in full, from IGN

"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 1900 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."

These job cuts come just a week after Xbox's 2024 Developer Direct showcase, which is where we learned Senua's Saga: Hellblade II will be released in May, what the first-person combat in Obsidian's Avowed looks like, and that Square Enix's Visions of Mana hits PlayStation, Xbox, and PC this summer. We also got our first look at Ara: History Untold, and the first taste of gameplay from Indiana Jones and The Great Circle, Machine Games' first-person take on the famed archaeologist that hits Xbox later this year. 

These Microsoft layoffs join a string of other disheartening 2024 job cuts, which total more than 5,500 in just the first 25 days of the year. Outriders studio People Can Fly laid off more than 30 employees this week, and League of Legends company Riot Games laid off 530 employees this week, too. 

We recently learned Lords of the Fallen Publisher CI Games was laying off 10 percent of its staff, that Unity would be laying off 1,800 people by the end of March, and that Twitch had laid off 500 employees

We also learned that Discord had laid off 170 employees, that layoffs happened at PTW, a support studio that's worked with companies like Blizzard and Capcom, and that SteamWorld Build company, Thunderful Group, let go of roughly 100 people. Dead by Daylight developer Behaviour Interactive also reportedly laid off 45 people, too

Last year, more than 10,000 people in the games industry or game-adjacent industries were laid off. 

In January of last year, Microsoft laid off 10,000 employees amidst its ongoing $69 billion acquisition of Activision Blizzard, which it completed in October

Striking Distance Studios, the team behind 2022's The Callisto Protocol, laid off more than 30 employees in August of 2023. That same month, Mass Effect and Dragon Age developer BioWare laid off 50 employees, including long-time studio veterans. The following month, in September, Immortals of Aveum developer Ascendant Studios laid off roughly 45% of its staff, and Fortnite developer Epic Games laid off 830 employees

In October of last year, The Last of Us developer Naughty Dog laid off at least 25 employees, and Telltale Games also underwent layoffs, although an actual number of affected employees has not yet been revealed. Dreams developer Media Molecule laid off 20 employees in late October.

In November, Amazon Games laid off 180 staff membersUbisoft laid off more than 100 employeesBungie laid off roughly 100 developers, and 505 Games' parent company, Digital Bros, laid off 30% of its staff

In December, Embracer Group closed its reformed TimeSplitters studio, Free Radical Design, and earlier in the year, Embracer closed Saints Row developer Volition Games, a studio with more than 30 years of development history. A few weeks before the winter holidays, Dungeons & Dragons and Magic: The Gathering owner Hasbro laid off 1,100 employees

The games industry will surely feel the effects of such horrific layoffs for years to come. The hearts of the Game Informer staff are with everyone who's been affected by layoffs or closures.

[Source: IGN]

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