In the gaming sector, there have already been almost 6,000 layoffs in 2024.
In spite of the fact that we are only one month into the year 2024, it has already been yet another difficult year for those who work in the video game industry. Microsoft is the most recent corporation to announce a significant round of layoffs in its gaming division. The company is reducing the number of employees working for its Xbox, Activision Blizzard, and ZeniMax (formerly known as Bethesda) teams by approximately 1,900. With this, the total number of layoffs in the video game industry for this year has already reached approximately 6,000. According to some estimates, the industry, as a whole, saw approximately 9,000 layoffs for the entire year of 2023.
The leadership of Microsoft Gaming and Activision Blizzard is committed to uniting on a strategy and an execution plan with a sustainable cost structure that will support the entirety of our growing business. This commitment is being made as we go forward in the year 2024. The CEO of Microsoft Gaming, Phil Spencer, was quoted as saying to staff in a message that was acquired by The Verge that “together, we have set priorities, identified areas of overlap, and ensured that we are 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.”
It has been three months since Microsoft finally completed its $68.7 billion acquisition of Activision Blizzard, and it is believed that the majority of the jobs that have been eliminated are within the company. Additionally, there will be some positions on the Xbox and ZeniMax teams that may be impacted. Around eight percent of Microsoft’s gaming division will be eliminated as a result of these changes.
“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,” according to Spencer. We would want to express our appreciation for the vast amount of innovation, enthusiasm, and dedication that they have contributed to our games, our gamers, and our coworkers. We are committed to provide those who are affected by the transition with our full support, which will include severance payments that are in accordance with the employment legislation of the local area.
According to Spencer, Microsoft will “continue to invest in areas that will grow our business and support our strategy of bringing more games to more players around the world.” This statement was made about Microsoft’s future investments. I am as confident as I have ever been in your capacity to build and cultivate the games, stories, and worlds that bring gamers together, despite the fact that this is a challenging time for our team.
According to Xbox, which confirmed the information to Newtechmania, Spencer delivered this message to Microsoft staff on Thursday morning.
Mike Ybarra, the president of Blizzard Entertainment, is one of the employees that is leaving the firm. He is departing on his own accord. For the significant contributions that they have made to their teams, to Blizzard, and to the lives of players, I would want to express my gratitude to everyone who is affected today. Ybarra commented on X that “it is an extremely difficult day, and my energy and support will be focused on all those amazing individuals who have been impacted.” This is in no way a reflection on the incredible work that you have done.
“To the Blizzard community, I would also like to inform you all that today is the day that I will be leaving my position at Blizzard. Being a part of the team and helping to shape Blizzard for the future was an amazing pleasure, and it was a privilege to be able to lead the company through an incredible moment,” Ybarra concluded. “Having already spent 20+ years at Microsoft and with the acquisition of Activision Blizzard behind us, it’s time for me to (once again) become Blizzard’s biggest fan from the outside.” The decision to hire a new Blizzard president is scheduled to take place the next week, according to Matt Booty, who is the president of game content and studios at Microsoft.
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
This restructure has resulted in a number of significant consequences, one of which is that Blizzard’s survival game, which was codenamed Odyssey, has been canceled. Since the announcement of the project two years ago, Blizzard has not disclosed any additional information regarding the project, despite the fact that this would have been the company’s first foray into a new genre. Some of the devs who were working on the survival game are being transferred to “one of several promising new projects Blizzard has in the early stages of development,” according to what Booty wrote.
The Odyssey project has been in the works for a period of six years, as stated by a reporter for Bloomberg named Jason Schreier. Blizzard executives reportedly instructed the team to switch from developing the game in Unreal Engine to using an in-house engine called Synapse. This occurred approximately halfway through the development process. It was taking an excessive amount of time for the technology to come together. In spite of the fact that early versions of the game received great reviews, it was going to take several more years before Odyssey would be completed. As a result, Activision Blizzard ultimately decided to scrap the game after reportedly coming to the conclusion that Synapse was not yet ready for prime time.
After big mergers, it is usual practice to lay off employees, particularly after higher-ups identify areas of overlap in the organization. When it comes to roles on the business side, such as marketing and human resources, this is something that is frequently observed.
In comparison to the 1,800 employees that Unity is laying off, this is the greatest single slate of layoffs that has occurred in the gaming business so far in 2018. In addition, Twitch and Discord are each laying off hundreds of potential employees. This past week, Riot Games announced that it would be cutting its workforce by approximately 530 individuals. Behaviour Interactive, the company that developed Dead by Daylight, Lost Boys Interactive, the company that developed Tiny Tina’s Wonderland, and People Can Fly, the company that made Outriders, are just some of the numerous gaming firms that have let off employees so far in the year 2024.
An official statement sent by the Communications Workers of America (CWA) to Newtechmania stated that none of the organization’s members were affected by the layoffs. The union is a representative of hundreds of individuals working in the gaming division of Microsoft. These individuals include approximately 300 quality assurance personnel at ZeniMax and others working at companies such as Raven Software.
In June of last year, Microsoft made a commitment to take a neutral stance in the event that employees who were covered by an agreement with the CWA expressed interest in establishing a union. This was done in an effort to placate regulators and bring its acquisition of Activision Blizzard to a successful conclusion. CWA, on the other hand, was in favor of the proposed merger.
At 3:59 p.m. Eastern Time on January 25, additional information regarding the cancellation of Odyssey was added to the report from Bloomberg.
Updated at 1:20 p.m. Eastern Time on January 26: The CWA has confirmed that none of its members have been released from their positions.