Microsoft Announces Layoffs of 1900 Employees from Video Game Workforce

Microsoft, the second-largest publicly traded company in the world, with a market capitalization of over $3 trillion, recently announced layoffs of approximately 1,900 employees from its video game workforce. The news came as a shock to many, as the tech giant had just completed a $69 billion acquisition of Activision Blizzard, the publisher behind popular franchises such as Call of Duty and World of Warcraft.

In a memo to staff, Xbox boss Phil Spencer stated that the company was committed to aligning on a strategy and an execution plan with a sustainable cost structure to support the growing business. He also mentioned that the affected employees had all played an important part in the success of Activision Blizzard, ZeniMax, and Xbox teams and expressed gratitude for their contributions.

The layoffs come after significant cuts to marketing budgets and follow a trend of mass layoffs in the video game industry, even at companies that continue to deliver huge profits. The Communications Workers of America (CWA), which represents hundreds of gaming workers across Microsoft subsidiaries, stated that the layoffs did not impact workers they represented and vowed to continue supporting workers at Microsoft and across the video game industry who wanted to have a union voice on the job.

Blizzard Entertainment President Mike Ybarra, who joined Blizzard in 2019 and is a former Xbox executive, announced that he was leaving the company. Additionally, Blizzard’s chief design officer and co-founder Allen Adham is also leaving the developer behind World of Warcraft, Diablo, and Overwatch. The survival game, Odyssey, which had been in development for an extended period, has been cancelled.

The cuts come after a showcase in which Xbox previewed a number of upcoming exclusive games, such as MachineGames’ Indiana Jones and the Great Circle, Obsidian’s Avowed, Ninja Theory’s Hellblade 2, and Oxide Games’ Ara: History Untold. Last year, Sarah Bond was promoted to Xbox president, and Matt Booty was promoted to president of game content and studios, in an Xbox leadership shakeup.

Layoffs are becoming a norm in the video game industry, with a number of high-profile studios cutting staff or shutting down. The prevalence of mass layoffs, even at companies that continue to deliver huge profits, is a concerning trend. While actual figures are difficult to obtain, estimates suggest that the number of workers laid off in games last year approached or exceeded 10,000, and 2024 isn’t looking much better. A recent GDC survey of developers suggests that one-third of all game developers were impacted by layoffs last year, either directly or by witnessing them happen at their company.

The impact of these layoffs on the affected individuals and their families cannot be overstated. Many had spent years working hard and remaining loyal to the company, only to be let go without warning. The loss of jobs also has ripple effects on the economy, as the affected individuals may struggle to find new employment and contribute to the workforce.

The video game industry is a significant contributor to the global economy, with an estimated revenue of over $150 billion in 2022. The industry’s continued growth and innovation rely on the talent and dedication of its workforce. The recent trend of mass layoffs threatens to undermine the industry’s progress and stability.

Microsoft’s decision to lay off 1,900 employees from its video game workforce is a reminder of the human cost of corporate restructuring and consolidation. It is essential that companies prioritize the well-being of their employees and consider the long-term consequences of their actions on the industry and the economy as a whole.

Union representation can provide workers with greater transparency and policies that put their needs first, including layoff protections. The CWA’s call for every video game worker to join their union is a step in the right direction towards creating a more stable and equitable industry.

In conclusion, Microsoft’s announcement of layoffs of 1,900 employees from its video game workforce is a concerning trend in the industry. The human cost of these layoffs cannot be ignored, and it is essential that companies prioritize the well-being of their employees and consider the long-term consequences of their actions on the industry and the economy as a whole. Union representation can provide workers with greater transparency and policies that put their needs first, including layoff protections. The CWA’s call for every video game worker to join their union is a step in the right direction towards creating a more stable and equitable industry.