Microsoft to lay off 1,900 staff from gaming division, CEO Phil Spencer calls it painful

The CEO in a memo said that the layoffs were intended to minimise areas of overlap.

Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard logo in this illustration taken January 18, 2022. (File Photo: Reuters)

It seems there will not be any respite for tech professionals anytime soon, as layoffs continue unabated. Tech giant Microsoft is the latest to announce layoffs, the company is reportedly sacking around 1,900 people from its gaming division. According to a memo accessed by CNBC, Microsoft Gaming CEO Phil Spencer said that the layoffs were intended to minimise areas of overlap. The gaming division had a strength of 22,000.

In the memo, Spencer has been reported to describe the layoffs as painful. He went on to say that those directly impacted by these reductions have all played an important part in the success of Activision Blizzard, ZeniMax, and the Xbox teams. He added that they should all be proud of everything that they have accomplished in the Gaming division.

The CEO also said that the company is planning to invest in areas that will grow the business and support its strategy of bringing more games to more players around the world. Incidentally, the latest development comes after Microsoft closed its acquisition of Activision Blizzard known for titles such as ‘World of Warcraft’, ‘Call of Duty’, ‘Spyro’, etc.

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Spencer, while acknowledging the contribution of the team members, also assured that they will be offered full support during the transition including severance benefits as informed by local employment laws. He added that the roles that will be impacted will be notified. Spencer also urged the teams to treat their departing colleagues with respect and compassion, something which according to him has been consistent with the brand’s values.

Meanwhile, as part of the layoffs, Mike Ybarra, president of Blizzard Entertainment announced his departure from the company. Ybarra joined Blizzard in 2019. “To the incredible teams at Blizzard – thank you. Words can’t express how I feel about all of you. You are amazing. Continue to do incredible things and always keep Blizzard blue and the player at the forefront of every decision,” Ybarra said in his long post on X.

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Meanwhile, Blizzard’s chief design officer co-founder Allen Adham is also developing. Reportedly, Microsoft’s gaming teams have already been marred by significant cuts in budgets even before the layoffs took place.

The gaming segment has had several layoffs in the last few weeks. Earlier, this week, Riot Games was reported to have laid off 530 employees and shut down its publishing arm Riot Forge. Earlier this month, Lost Boys Interactive, a Gearbox-owned video game developer with 400 employees fired a sizable portion of the company.