Microsoft to lay off 1,900 employees in gaming division

Microsoft's gaming division is set to lose nearly 1,900 employees, roughly 9% of its workforce, following the company's $69 billion acquisition of Activision-Blizzard.
The news, confirmed in a memo by Xbox boss Phil Spencer, comes just three months after the blockbuster deal, sending shockwaves through the industry. While Spencer acknowledges the "painful decision," he stresses the move aims to streamline operations and focus resources on strategic priorities.
The layoffs are expected to impact employees across the Xbox division, as well as publisher Zenimax, which houses renowned studios like Bethesda and Arkane. Details on the specific distribution of job cuts within each unit remain unavailable.
However, a separate message to Blizzard staff by Microsoft Studios head Matt Booty confirms additional layoffs within the company. He assures affected employees of comprehensive support, including severance packages compliant with local regulations, while announcing the cancellation of a major survival game project known as Odyssey.
This news follows a turbulent year for Microsoft's gaming business. Just in January, the company announced a broader 10,000-job cut across its entire operation. Additionally, Activision-Blizzard CEO Bobby Kotick stepped down after the merger, while Blizzard head Mike Ybarra recently announced his departure, returning to being a "fan from the outside."
This wave of layoffs reflects a broader trend within the gaming industry. Rising costs of living, coupled with a return to pre-pandemic market conditions after the initial Covid boom, have pressured companies to downsize and restructure. Earlier this year, prominent studios like Riot Games, Unity, and Twitch also witnessed significant job cuts.
Experts estimate that the gaming industry shed over 10,000 jobs in 2023, with the actual number likely higher. While Microsoft's decision is undeniably a blow to many employees, it highlights the ongoing shift and consolidation within the gaming landscape.