After its $69 billion acquisition of Call of Duty makers Activision Blizzard, Microsoft is laying off 1,900 staff members across its Xbox studios, including Activision, Blizzard and Zenimax.

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In a message to staff (as viewed by IGN), Xbox CEO Phill Spencer called it a “painful decision” but a necessary step to execute a plan “with a sustainable cost structure.”

Here’s Spencer’s statement in full:

“It’s been a little over three months since the Activision, Blizzard, and King teams joined Microsoft. 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 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.”

As a result of the layoff, Mike Ybarra, President at Blizzard Entertainment, has announced his departure from the company and issued the following statement on X:

Blizzard’s Chief Design Officer and Co-founder Allen Adham is also leaving. The studio’s in-development survival game, dubbed Odyssey, is also been cancelled.

Layoffs have been relentless since last year, and it doesn’t seem like they will stop any time soon. In 2023, over 10,000 developers were laid off from their positions. In just 25 days in 2024, there have already been over 5,600 layoffs – more than half of what we saw last year.

As AAA game development continues to become more and more unsustainable, we can expect to see even more layoffs as the year rolls by, as well as studio closures as publishers try to steer the ship towards profitability.

Mufaddal Fakhruddin
Mufaddal Fakhruddin

Mufaddal Fakhruddin has been writing about games and technology for the past 15 years. He has lost count as to how many reviews he has written over the years, but he is sure headphone reviews make up at least 70% of that.

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