Microsoft’s gaming division is set to lay off nearly 2,000 employees, according to a memo from Xbox boss Phil Spencer. The decision follows the completion of the $69 billion merger deal with Activision-Blizzard, renowned for franchises like Call of Duty and Warcraft.
In the verified letter, Spencer expressed that letting go of staff was a “painful decision.” The impact is expected to extend to the Xbox division and Zenimax, responsible for studios like Bethesda and Arkane. Microsoft has been asked by BBC Newsbeat to provide details on the distribution of layoffs across different business units.
A second letter from Microsoft Studios head Matt Booty, also confirmed as authentic, was addressed to Blizzard staff. Booty stated that meetings with affected employees would occur throughout the day, with international staff receiving notifications later. The company pledged full support, including severance benefits following local employment laws, and confirmed the halt of the Odyssey survival game project.
Microsoft’s acquisition of Activision-Blizzard and King in September faced regulatory hurdles, leading to the departure of Activision CEO Bobby Kotick. Blizzard boss Mike Ybarra, in response to the recent news, expressed gratitude for leading the company but announced his departure.
The gaming industry has witnessed a wave of layoffs this year, with Riot Games, Unity, and Twitch making significant workforce reductions. Analysts attribute this trend to the cost-of-living crisis and a pullback in the games industry following the Covid pandemic boost. Last year alone, over 10,000 job losses were estimated in the gaming sector. Microsoft has yet to provide further comments on the layoffs in its gaming division when approached by the BBC.