2023 was a brutal year for the games industry with its never-ending wave of layoffs, but 2024 is somehow turning out to be significantly worse. Less than a month into the year, the industry has already seen thousands of jobs being cut, and another significant number has now been added to that total, with IGN reporting that Microsoft’s gaming division is cutting 1,900 jobs out of its total workforce of about 22,000.
In an internal memo sent out to employees, Microsoft Gaming CEO Phil Spencer said the layoffs come as a result of Microsoft Gaming and Activision Blizzard looking to “align on a strategy and an execution plan with a sustainable cost structure”, as a result of which jobs will be made redundant across Xbox, Activision Blizzard, and ZeniMax.
“It’s been a little over three months since the Activision, Blizzard, and King teams joined Microsoft,” Spencer’s memo reads. “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.”
Microsoft joins a long list of companies that have hit their staff with layoffs right at the outset of 2024, including Unity, Riot Games, Thunderful Group, Lost Boys Interactive, CI Games, Black Forest Games, Behaviour Interactive, and People Can Fly, among others.
Incredibly enough, this isn’t Microsoft’s most brutal round of layoffs in recent memory. Almost exactly a year ago, the company laid off over 10,000 employees across all of its divisions, with its gaming arm also being significantly impacted. The company is currently valued at over $3 trillion, and is only the second company ever to cross that market cap.