Microsoft’s recent acquisition of gaming giant Activision Blizzard has led to a significant shakeup in the gaming industry, with the announcement of layoffs affecting 1,900 employees in Microsoft’s gaming divisions. This constitutes around 8.6 per cent of the 22,000 Microsoft employees in the gaming sector. The layoffs come just three months after the completion of the $68.7 billion acquisition, and they coincide with Blizzard president Mike Ybarra’s decision to step down now that the acquisition has been finalized.
In a statement, Ybarra expressed gratitude to those impacted by the layoffs for their significant contributions, emphasizing that the decision does not diminish their outstanding work. The move aligns with Microsoft’s execution plan aimed at establishing a sustainable cost structure and addressing areas of overlap identified after the acquisition. An internal memo from Microsoft Gaming CEO Phil Spencer outlined the layoffs as part of a strategy to ensure a sustainable cost structure, with support including severance benefits informed by local employment laws being provided to affected employees.
The gaming industry as a whole has been experiencing a wave of layoffs in the first weeks of the year, with companies like Riot Games, Unity, Discord, and Twitch all making significant staff reductions. According to game developer and consultant Rami Ismail, approximately 5,600 gaming employees have been laid off in 2024, surpassing half of the total gaming layoffs in 2023. Additionally, the tech industry has also faced layoffs, with companies like Google, Amazon, and TikTok making cuts. January appears to be a challenging month for layoffs, following the trend observed in 2023.
Notably, over the past few years, certain departments within Microsoft and Activision have established some of the first gaming unions in the country. The Communications Workers of America, representing unionized workers, highlighted the benefits of unions in negotiating over the impact of layoffs. While CWA-represented members at Zenimax, Raven, and Blizzard Albany will not be affected by these cuts, the union expressed sadness over the disruption in the lives of dedicated and talented video game workers.
Opinion: With the recent wave of layoffs in the gaming and tech industries, it is imperative for companies to prioritize the well-being of affected employees and to consider the long-term impact of these decisions on the workforce and the industry as a whole. It is also important for unions to play a role in advocating for the rights and interests of workers during times of upheaval.