Microsoft will lay off 1,900 employees from its Xbox console subsidiary and Activision Blizzard, just over three months after finalizing the acquisition of the video game publisher. The figure, which represents approximately 9% of the 22,000 employees assigned to video games, appears in an internal letter published by several American media and whose authenticity has been confirmed by Microsoft. The internal message is signed by the head of video games at Microsoft, Phil Spencer, who justified the decision by the desire to calibrate the entity “with a sustainable cost structure”.
He noted “duplication” and Microsoft’s intention to prioritize projects that generate potential growth. In a message posted on X (formerly Twitter), Activision Blizzard president Mike Ybarra confirmed a wave of job cuts as well as his immediate departure. “This is an incredibly difficult day,” the executive wrote, noting that Thursday was his “last day” at the company. Microsoft had to wait more than twenty months before finalizing the acquisition of Activision Blizzard, for $69 billion, due to regulatory obstacles, which were finally removed.
Difficult context in the video game
These job cuts come at a time when other major players in video games have also recently announced layoffs. On Monday, Riot Games, publisher of the League of Legends game and a subsidiary of Chinese Tencent, indicated the upcoming reduction of its workforce by around 11%, or 530 jobs. At the beginning of January, the streaming platform Twitch, an Amazon subsidiary made popular by “gamers”, said it planned to let go of 500 employees, or around a third of the whole.
Last year, Microsoft, like most technology giants with the notable exception of Apple, had already cut its workforce, with a first wave of 10,000 job cuts, announced in January, followed by another, during the summer. Microsoft’s announcement “clearly shows that even when you work for a successful company, in an extremely profitable industry, you are not protected if you do not have a representative”, reacted the union of communication professions (CWA).
Only a handful of employees are unionized at Microsoft, namely employees of the video game subsidiary ZeniMax Media. The CWA encouraged Microsoft teams dedicated to video games but also the entire industry to “come together and exercise their right to union representation”. Union activity has traditionally been very low in the broader technology sector. In mid-December, Microsoft committed, as part of a partnership with the powerful American union AFL-CIO, to a position of neutrality in union matters. This means that the group will not seek to dissuade those of its employees who would like to form a union organization.