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Microsoft lays off 1,900 employees in Activision Blizzard and Xbox divisions

Three months after completing its $68.7 billion acquisition of gaming company Activision Blizzard, Microsoft is laying off 1,900 employees in its gaming divisions. This amounts to about 8.6% of 22,000 Microsoft employees in gaming. Blizzard president Mike Ybarra also announced he will step down, now that the acquisition is finalized.

"I want to thank everyone who is impacted today for their meaningful contributions to their teams, to Blizzard, and to players’ lives," Ybarra said on X. "It’s an incredibly hard day and my energy and support will be focused on all those amazing individuals impacted -- this is in no way a reflection on your amazing work."

According to an internal memo from Microsoft Gaming CEO Phil Spencer, first obtained by The Verge, the layoffs are part of "an execution plan with a sustainable cost structure" that "identified areas of overlap" after the acquisition. Microsoft confirmed the legitimacy of The Verge's reported memo in an email to TechCrunch.

"We will provide our full support to those who are impacted during the transition, including severance benefits informed by local employment laws," Spencer's memo reads. "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."

In just a few weeks, this year has already proven brutal for the gaming industry. So far, League of Legends maker Riot Games laid off 530 employees; game engine Unity laid off 1,800 people (25% of the company); Discord cut 170 jobs (17%); and Amazon-owned Twitch laid off 500 people (35%), after it already laid off hundreds of employees in two layoff rounds last year.

According to game developer and consultant Rami Ismail, about 5,600 gaming employees have been laid off so far in 2024. That's more than half of all gaming layoffs from 2023.

The rest of the tech industry hasn't been spared either, with companies like Google, Amazon, TikTok and others making cuts. But, per data from tech layoffs in 2023, it seems January is the most brutal month for layoffs.

Over the last few years, a few departments within Microsoft and Activision have formed some of the first gaming unions in the country.

"With a union, employers are required to negotiate over the impact of layoffs," the Communications Workers of America, which represents the unionized workers, told TechCrunch. "While CWA-represented members at Zenimax, Raven, and Blizzard Albany will not be impacted by these cuts, we are heartbroken that the lives of so many dedicated and talented video game workers will be disrupted."

Updated, 1/25/24, 12:10 PM ET with comment from the CWA.