Microsoft is laying off 1900 people across the video game teams, including Activision Blizzard, ZeniMax and Xbox, equating to approximately eight percent of its gaming workforce.
In an internal email seen by The Verge, Microsoft's gaming head Phil Spencer called this a "painful decision".
"It's been a little over three months since the Activision, Blizzard, and King teams joined Microsoft," Spencer wrote in his email to staff. "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 1900 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."
The layoffs follow Microsoft's $69bn acquisition of Activision Blizzard last year, and $7.5bn acquisition of Zenimax in 2021.
It has also been announced that Blizzard president Mike Ybarra is departing Microsoft, along with Blizzard's chief design officer Allen Adham.
Sharing the news on X, Ybarra thanked those at Blizzard, calling today an "incredibly hard day".
"To all of those impacted today - I am always available to you and understand how challenging today’s news is. My heart is with each one of you," he wrote.
The execs' departures mark the end of Blizzard's previously announced survival game, which has now been cancelled.
This project was being helmed by ex-Far Cry boss Dan Hay. When this game was first announced in 2022, Blizzard said it would be set in a "whole new universe".
"Blizzard is embarking on our next quest," the company wrote at the time. "We are going on a journey to a whole new universe, home to a brand-new survival game for PC and console."
This universe is "a place full of heroes we have yet to meet, stories yet to be told, and adventures yet to be lived", Blizzard added. "A vast realm of possibility, waiting to be explored."
You can see its concept art below, showing two young figures happening upon a passage that leads away from their dreary urban home to a verdant fantasy world.
Last October, Microsoft announced a reorganisation of its Xbox leadership team, which saw Sarah Bond’s role expanded to overseeing a number of internal teams under a new title of President of Xbox. Matt Booty, previously known as Head of Xbox Game Studios, received the new job title of President, Game Content and Studios. This reorganisation followed the retirement of Bethesda exec Pete Hines.
Just last week, GDC published its 2024 State of the Game Industry report. Here, it said 35 percent of game developers had been impacted by layoffs in the last 12 months. Additionally, half of those surveyed said they are concerned more job cuts are on the way.
This year has already seen multiple companies announce layoffs, including League of Legends developer Riot Games. Earlier this month, the company revealed it was laying off 530 employees, equating to roughly 11 percent of its total global workforce. Others affected this year include Black Forest Games, Unity, Behaviour Interactive and Lords of the Fallen publisher CI Games.
This story is developing.