Microsoft will lay off 1,900 employees from its Xbox console subsidiary and Activision Blizzard, three months after finalizing its acquisition of the video game publisher. This figure, which represents approximately 9% of the 22,000 employees assigned to video games, appears in an internal letter published by several American media and whose authenticity has been confirmed by Microsoft. The internal message is signed by Microsoft’s head of video games, Phil Spencer, who justified the decision by the desire to scale the entity “with a sustainable cost structure”.
He noted Microsoft’s intention to prioritize projects that generate “duplication” and potential growth. In a message posted on X (formerly Twitter), Activision Blizzard President Mike Ybarra confirmed the wave of job cuts as well as his immediate departure. “It’s been an incredibly difficult day,” the executive wrote, adding that Thursday was his “last day” at the company. Microsoft had to wait more than twenty months before finalizing its acquisition of Activision Blizzard for $69 billion due to regulatory hurdles, which were eventually cleared.
A difficult reference in a video game
The job cuts come at a time when other major players in video games have also recently announced layoffs. On Monday, Riot Games, publisher of the League of Legends game and a subsidiary of Chinese Tencent, indicated an upcoming reduction in its workforce of approximately 11%, or 530 jobs. In early January, streaming platform Twitch, an Amazon subsidiary made popular by “gamers,” said it planned to let go of 500 employees, or around a third of its workforce.
Last year, Microsoft, like most technology giants with the notable exception of Apple, reduced its workforce with the first wave of 10,000 job cuts, announced in January, followed by another during the summer. Microsoft’s ad “clearly shows that even when you work for a successful company, in a highly profitable industry, you’re not safe if you don’t have a representative”, the Communication Professions Union (CWA) responded.
Only a handful of employees at Microsoft are unionized, namely employees at video game subsidiary ZeniMax Media. The CWA also encouraged Microsoft teams dedicated to video games to “come together and exercise their right to union representation” across the industry. Union activity in the broader technology sector has traditionally been very low. In mid-December, Microsoft committed to a position of neutrality in union affairs, as part of a partnership with the powerful American union AFL-CIO. This means that the group will not try to antagonize its employees who want to form a union organization.
