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Microsoft Is Cutting 1,900 Jobs From Its Video Game Division

Xbox boss Phil Spencer said that this has been a "painful decision" to make.

91 Comments

In the latest round of layoffs to hit the gaming industry, 1,900 people from Microsoft's video game division will be cut from the company. In a new memo sent to staff (via IGN), Xbox head Phil Spencer spoke about "the painful decision" to reduce the number of people in the Microsoft video game workforce, while also pledging to "fully support" those people affected with severance benefits. GameSpot has reached out to Microsoft, and the company has confirmed that the memo is accurate.

"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," Spencer wrote. "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."

Microsoft was finally able to close its $69 billion acquisition of Activision Blizzard in 2023. These types of moves often lead to some layoffs due to the "overlap" referred to by Spencer, although it's unclear what portion of the 1,900 layoffs are attributable to that. This figure amounts to almost 9% of all Xbox employees.

The one specific individual we know who will no longer be with the company is Mike Ybarra, Blizzard's president, who shared the news on Twitter/X. According to The Verge, Blizzard's previously announced survival game has also been canceled as a result of these layoffs.

Layoffs have been felt throughout the gaming industry lately, as despite 2023 being a massive year for blockbuster video game releases, companies across the globe have been cutting jobs.

This week alone, THQ Nordic and Embracer subsidiary Black Forest Games reportedly cut 50% of its workforce, Outriders developer People Can Fly is set to lose 30 employees, and in the wake of Riot laying off 530 employees, its publishing label Riot Forge has been shut down.

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GalvatronType_R

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Edited By GalvatronType_R

Microsoft is a multitrillion dollar conglomerate. It and Apple go back and forth on which company is the most valuable in the world by market cap. Yet they cashier 1,900 employees just for a few pennies more in profit.

Gotta love corporate America.

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noodles227

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@GalvatronType_R: Much better than most other countries economies. Not every country, but most by a large margin.

It's a nice fantasy to have. To want to live in a world where people just give you stuff to be nice and because they have excess. Id like to live there but the reality is when your use has run out you're gone.

I think it's a good thing to push for people having a better standard of living and an equal opportunity to succeed. But I'm not a fan of equity amongst the people or other laws and regulations that bring us closer to that big S word type of system.

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Wbrabbit

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@GalvatronType_R said:

Microsoft is a multitrillion dollar conglomerate. It and Apple go back and forth on which company is the most valuable in the world by market cap. Yet they cashier 1,900 employees just for a few pennies more in profit.

Gotta love corporate America.

It will eventually eat itself. It happens about every 100 years. Give it 10 years. You'll see a depression. It's boomtime now, but it's all built on speculation.

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ceelogreen94

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WHO CARES!

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mogan

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Edited By mogan  Moderator

@ceelogreen94: At least 1,900 people.

And anybody else with a little empathy.

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santinegrete

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Edited By santinegrete

@mogan: yeah, I didn't know it was a trend to not care or be inconsiderate to people that want a job and an acceptable quality of life.

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hellhammer

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@mogan: life goes on

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ceelogreen94

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@mogan: do you know any of these people because if not no one should care at all.

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mogan

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Edited By mogan  Moderator

@ceelogreen94: Look, I get that you're acting like this shouldn't matter to anybody here because it's Microsoft cutting jobs, and your comment history is solidly pro-Xbox and anti-PlayStation, but pretending not to understand basic human empathy is not a good look.

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ceelogreen94

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Edited By ceelogreen94

@mogan: Yes, I'm pro-XBOX and anti- Sony. However, I still don't give a damn about who got fired or who they keep. I don't know any of these people and they didn't do a damn thing for me personally other than make games. They don't pay my bill or otherwise. 1,900 people may seem like a lot of people to you but in the grand scheme of things it's only about 7-8 percent of the people they have. There are other things in life besides gaming, you know. Maybe they should get together and make another studio. If not they had their chance and that, is it.

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santinegrete

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Edited By santinegrete

@ceelogreen94: wonder what you'll say when you are on kicked out to the curb because some investors wanted to see the stock go up.

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ceelogreen94

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Edited By ceelogreen94

@santinegrete: Never going to happen I run my own company man, so sorry to tell you that. I don't do that work for people mess anymore learned that a long time ago. Being your own man and boss is better than working people.

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OrionMD

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@ceelogreen94: i award you no points. And may God have mercy on your soul.

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ceelogreen94

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@OrionMD: nothing because this how business works. either play the game or get lost it's that simple.

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ceelogreen94

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@OrionMD: not looking for awards but that's the truth. You all care to much about people that you will never meet in life. Also I love how this site and the people on it are know so sad that people from Microsoft got fired, when this site and just everybody on it has an extreme hate for anything XBOX. So if this makes you feel something for Xbox then don't be hypocrite, keep that same energy buddy because God know this site must be on Sony Payroll.

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Utnayan

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Edited By Utnayan

This is the result of DEI policies and knowing that quality within Blizzard took a DIRECT hit as a result. Diablo 4 is and continues to be a nightmare. Overwatch 2 has failed. The latest Warcraft Expansion was drivel. The unionization of Acti-Blizz to protect low talent hires which only protected the jobs of people who didn't have the talent or skill to work there anyway - this list goes on and on. This shouldn't be shocking as markets in the US are course correcting - and an acquisition is the perfect time to do it.

Acti-Blizz is in shambles - and the house cleaning is starting to occur.

However, will it change the quality of titles? Doubtful. With Gamepass, there is a good value there especially if you loaded up on prepaid Xbox Live cards for 3 years and converted. With subscription services like Gamepass, you will continue to see mediocre titles just good enough to keep you subscribed via 1st party. It is called lowest common denominator development. Bethesda will also be hit in similar fashion although that will just be referred to as the XBox Games Division after Starfield and it being a completely lackluster title.

The layoffs, while promising to get real talent back in the seats, is a bandaid. The only way the quality of games titles reverses back to glory now will be either a severe loss in revenue, which customers control, or an industry crash which will continue to be prolonged via this bandaid approach.

Most of all, nothing will change until the games development process (Director, producer level) is changed to listen to their field of talented developers who know way more about game design than mouth pieces like Todd Howard. And the culture of speaking up to common sense meaning you have a mark on your back. Literally the games industry is plagued with adults acting like 4 year old crybabies in all structures of management with axe's to grind against anyone who goes against their, usually wrong, thought process.

And the talent there under it can find far better paying jobs outside the games industry without the headaches.

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Musicsvictim

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Edited By Musicsvictim
@Utnayan said:

The unionization of Acti-Blizz to protect low talent hires which only protected the jobs of people who didn't have the talent or skill to work there anyway

The video game industry as a whole is in desperate need of more people joining unions. Far too many expectations by those in the management roles for people to work later or more hours to get a game out, with no protection when they inevitably get laid off after a project is done because that was always the expectation.

The idea that the union at Raven was created to protect "low talent hires" is utterly laughable. The unionization of QA is important for keeping the skills that those team members will build up protected whilst ensuring they are recognized for the work that they do.

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gamespotter_198

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After such a big acquisition and not to mention how dragged-out the process was globally for them, I'd be surprised if they don't cut even more people in the Xbox division throughout this year.

Moreover, I think Game Pass is still under-priced for what it must be costing them to run that service in my opinion. They have a significant people-burden on their hands and will look to be more lean in order to keep the price of game pass still below what it needs to be.

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Wbrabbit

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@gamespotter_198: Well, they won't be burdened by people for long. Their last console was trash and so is Game Pass. I wouldn't pay $3 for it.

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gamespotter_198

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Edited By gamespotter_198

@wbrabbit: When I said "people-burden", I meant their employees. Full-time employees are a huge cost burden for companies.

Also from a money-making machine perspective, Game Pass is a success for MS. The latest article on their subscriber count suggests that they have 25 million subscribers. Ignore the title of the article suggesting they've hit 30 million. They've updated the article since it was originally published. https://www.windowscentral.com/gaming/xbox/xbox-game-pass-has-over-30-million-subscribers-according-to-linkedin

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Wbrabbit

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@gamespotter_198: Well it's a Window Central article, I'm not sure they'd tell their investors real subscriber counts. I'll give you an example. My MS games are open on my comp all the time. I close them. They re-open. Microsoft also takes the liberty of opening up a large number of other MS products I haven't used in 20 years. So if someone looked at my numbers there, I'm using Microsoft all day every day. In reality, I'm afraid to even use their Windows updates, they mangle my $3,000 comp for 24-hours after every update.

Microsoft will never be hurting for money. I understand layoffs happen. They're not even the most negligent, boneheaded company out there, there are many more just as bad or worse. The government should have regulated these companies 20 years ago, but when you're dealing with 80-year-old politicians who don't even understand social media, the chances of that happening are zero. And it's a nice cash flow anyway, not sure they'd want to interrupt the party.

But yeah, Microsoft isn't going under any time soon. Most tech companies stay lively by ripping off investors, not customers. Investors have an endless stream of money, they'll just keep investing until it's happy hour again.

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lonewolf1044

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@gamespotter_198: Just Microsoft cutting the fat and this happens when companies acquire other companies, I do agree with you by the way.

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gamespotter_198

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@lonewolf1044: yep totally the case. I speculate that everyone at Activision expected this in the new year. There is no mention of what their severance package looks like though.

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lonewolf1044

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@gamespotter_198: Yeah, I do feel for them hopefully they can gets jobs with other Devs.

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Wbrabbit

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@lonewolf1044: They broke anti-trust laws in acquiring this company. Come 2024, that's going to be where the country gets back to business again. It's far past time to break up these monopolies.

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lonewolf1044

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@wbrabbit: Do not think so maybe you want it to happen but it won't and by the way the ink has dried.

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Wbrabbit

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@lonewolf1044: As much as I wish that weren't true, you're right. I do often write the world the way I wish it was. But it isn't happening. Maybe in the next life.

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mogan

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mogan  Moderator

@wbrabbit: After spending so long figuring out if Microsoft could really buy Activision or not, I kind of doubt the decisions are going to get reversed now that the deal is finally done.

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Wbrabbit

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Edited By Wbrabbit

@mogan: I wish you weren't, but you're right.

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Utnayan

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Edited By Utnayan

@mogan: Pretty much. And it's all in the hands of politicians to make these decisions anyway. Government is clueless about how these systems actually operate. I think MS taking Acti-Blizz over will be a good thing in the long run because there is a chance they could salvage some IP's, * if * they put the same amount of effort into gamepass game launch 1st party development as if their life depended on it as if they were relying on unit sales. But now with subscription services they have the luxury of long-term revenue prediction regardless of if a game is received well or not, and of course the entire subscription market of people forgetting what subscription service they are even renewing when auto renew comes along which maintains revenue regardless. I personally believe we will continue to see passable games but nothing earth shattering. Even Sony 1st party is starting to turn veer into the dumpster.

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espoac

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My question is: are these lay-offs due to the acquisition or are they the result of yet another tech company spending like mad in the hopes they'll unlock huge growth and then punishing workers when their reckless bet doesn't work out?

At any rate, I can't imagine it feels good to be an Activision employee right now. The MS acquisition maybe felt like the light at the end of the tunnel after years of a "culture of harassment". And instead the first impact you see is colleagues losing their jobs.

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mediastupid1

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surprised at how well xbox is doing. ( sarcasm)

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deactivated-670ee18aceebc

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Best year in gaming = layoffs en masse.

Makes me feel ashamed for giving these companies money.

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gamespotter_198

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@rabidgiantsr: I don't think you should feel ashamed. As unfortunate as it is for those who were let-go, I do think they'll find jobs elsewhere in the industry in due time. The good thing with the timing of this, which is likely deliberate on many of these companies' parts, is that it is the beginning of the year and not the end so those who were let-go have the best recruiting window approaching very soon.

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deactivated-670ee18aceebc

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@gamespotter_198: I understand what you're saying, but have to respectfully disagree. There's nothing "good" about the timing of any layoff.

Not sure what recruiting window you expect those folks to rely on, given the whole industry laying people off ...

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gamespotter_198

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Edited By gamespotter_198

@rabidgiantsr: Not sure if you work in the tech industry but I do. I've been a software developer for over 15 years. Going through mass layoffs is a cyclical thing in my line of work and especially at large tech companies. I have been a casualty of layoffs previously though not in a mass layoff but because I mostly tend to work at small tech companies. Getting laid off is obviously a painful experience but getting laid off at the end of the year is the worst timing-wise. It's why I was specifically referring to the timing of the mass layoffs because layoffs in the software world is a matter of when, not if.

Historically, Spring and Summer have been peak hiring season for many tech companies. In the gaming industry things might be a little different though but I don't expect it to be too different from regular software jobs. Having said that, I am pretty sure this year's Spring and Summer hiring will be different as the overall market is still down. So there will be a bit of an extended slump but again chances of landing a new job over the next few months are far better than in Q4 of any year.

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Wbrabbit

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@rabidgiantsr: They're lying about sales.

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Utnayan

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@rabidgiantsr: This wasn't even close to the best year of gaming and was rather the bottom 10% of gaming in a year.

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deactivated-670ee18aceebc

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@Utnayan: True, very subjective. I'm just regurgitating what gaming cites keep claiming. I don't know about bottom 10%, but agree it wasn't the best.

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drod0756

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@rabidgiantsr: Depends on how you are defining "best". If it is critically acclaimed titles then there is an argument to be made. This website gave 4 games a 10 when I cant recall a single year ever getting more than 1. Not to mention other great games like Spiderman 2, Street Fighter 6, Jedi Survivor, and Mario Wonder. Plus great indie titles like Venba, Cocoon, Sea of Stars, and Dredge. Still none of these great games guarantees profitability for companies making them so a great year for us isnt necessarily an automatic great year for them.

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deactivated-670ee18aceebc

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@drod0756: I agree.

I just don't love it when BILLIONAIRES layoff people claiming they "have" to. i.e.: Tim Sweeney at Epic games is worth $9.6 BIL, but said he had to layoff 800 people. Theres always another way ...

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Utnayan

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@rabidgiantsr: Copy that :)

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