Microsoft is laying off 1,900 employees from its video game workforce, primarily cutting roles at Activision Blizzard but some Xbox and ZeniMax staff will also be impacted.

In an internal memo obtained by The Verge, Microsoft Gaming CEO Phil Spencer confirmed the layoffs, and the company is set to cut roughly 8% of its workforce across Activision Blizzard, Xbox, and Bestheda’s parent company ZeniMax.

The layoffs come a few months following the completion of its $69 billion acquisition of Activision Blizzard, the company behind the Call of Duty series, World of Warcraft, and various notable titles.

The internal memo reads as follows:

“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.

Phil

Blizzard Entertainment

Following the layoffs, Mike Ybarra, a former Xbox executive who joined Blizzard Entertainment in 2019 as President, will also be departing from the company as confirmed in another internal memo by Matt Booty, Microsoft’s game content and studios president.

“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.”

The full statement by Ybarra as posted on Twitter regarding his departure:

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

Booty also confirmed that Microsoft planned to announce a new Blizzard Entertainment president next week.

Aside from Ybarra, Blizzard Entertainment co-founder and chief design officer Allen Adham will also be leaving the company, and the studio’s long-in-development survival game is also subsequently canceled.

“As one of Blizzard’s co-founders, 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,” said Booty.

Here’s Matt Booty’s internal memo in full:

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.

Matt

Unfortunately, mass layoffs have swept the video game industry since last year, with studios of all sizes being affected and reportedly 10,000 people being laid off in 2023.

The wave of widespread layoffs continues in 2024, with this Microsoft cut coming only a few days after we learned that Riot Games is letting go 11% of its workforce.

Lords of the Fallen publisher CI Games, Dead by Daylight studio Behaviour Interactive and livestreaming platform Twitch also confirmed layoffs in recent weeks.