Microsoft will lay off 1,900 employees at Activision Blizzard and Xbox, the latest tech company to announce cuts so far in 2024.
The layoffs represent about an 8% cut of its video gaming staff of 22,000 workers and come months after Microsoft acquired Activision in a blockbuster deal. The $69 billion transaction in October represented one of the largest tech deals in history as Microsoft took over the studios behind bestselling games like Call of Duty, Diablo and Overwatch for its Xbox console.
The planned cuts are part of a larger “execution plan” that would reduce “areas of overlap,” Microsoft Gaming CEO Phil Spencer wrote in an internal memo, which was quoted in multiple news reports.
"We are grateful for all of the creativity, passion and dedication they have brought to our games, our players and our colleagues," Spencer is quoted as saying in the memo. "We will provide our full support to those who are impacted during the transition."
Microsoft confirmed news of the layoffs when reached Thursday by USA TODAY but declined to provide a copy of the memo.
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Microsoft's acquisition of Activision Blizzard was seen as a strategy to keep pace with Sony and Nintendo in a console race by adding more games to its multi-game subscription service and cloud gaming libraries.
Microsoft’s Xbox gaming console, which ranks third in sales behind PlayStation and Nintendo, seeks to fold Activision titles into its Game Pass service, which isn't unlike Netflix but for video games.
The Wall Street Journal reported that the planned cuts, which mostly target Activision Blizzard employees, reflect "redundancies" after the October acquisition of the video game company. Spencer said in the cited memo that Microsoft would provide location-dependent severance to all laid-off employees.
Alongside the layoffs, two Blizzard Entertainment executives are leaving the company, President Mike Ybarra and design chief Allen Adham, a Microsoft spokesman told multiple outlets.
Ybarra confirmed the news himself of his immediate departure in a post Thursday on social media platform X, formerly Twitter.