In a significant restructuring move, tech giant Microsoft has declared layoffs affecting approximately 1,900 employees within its gaming division, including Activision Blizzard and Xbox. The decision, disclosed on January 25, marks an eight percent reduction in the overall Microsoft Gaming division, with a primary impact on Activision Blizzard.
The overhaul has led to the departure of key figures at Activision Blizzard, including President Mike Ybarra and Chief Design Officer Allen Adham. Furthermore, the layoffs have prompted the cancellation of a previously announced survival game by Blizzard.
This development follows Microsoft’s $69 billion acquisition of Activision Blizzard in 2023, solidifying its position in the video-gaming market and intensifying competition with industry leader Sony.
The Communications Workers of America (CWA) expressed concerns about job security, emphasizing the importance of a union voice to protect workers’ livelihoods even in successful and profitable companies. The CWA pledged ongoing support for Microsoft workers and others in the video game industry advocating for a union presence in the workplace.
Microsoft’s decision is part of a broader trend in the tech industry, where various companies, including Alphabet, Amazon.com, and eBay, have undertaken significant layoffs in recent weeks. The pursuit of cost-cutting measures and enhanced profitability has resulted in over 21,000 job cuts across 76 tech companies in January, as reported.
While the tech sector faced a significant workforce reduction of 168,032 jobs in 2023, particularly amid the increasing prominence of AI, industry analysts predict a comparatively lower number of layoffs this year.
Companies focusing on AI development are expected to navigate the competitive landscape, potentially offsetting costs through downsizing while investing substantial amounts in advancing AI technology.