Microsoft Lays Off Nearly 2,000, Including A Bunch From Activision Blizzard Studios

Too Much Free Time

from the cool-cool dept

And here we go. We have spent the past couple of years discussing Microsoft’s acquisition, and all the trials and tribulations that led to it, of Activision Blizzard. This deal, that faced mostly flaccid opposition from several national regulatory bodies throughout the world, cost Microsoft $69 billion, with a “b”, to consummate. And that’s just the sale price. That figure does not include all the money worldwide Microsoft spent to shadowbox all those regulators and the like. We’re talking serious dollars here, in other words.

So how are things going now that the deal has gone through? Well, Microsoft is canceling at least one Blizzard game that was in development while laying off nearly 2,000 workers specifically in its video gaming division. I’m going to focus on the workers, since I care much more about them than some game that was early on in its development.

Spencer said Microsoft was laying off 1,900 people starting today, with workers continuing to receive notifications in the coming days. The layoffs affect 8.64 percent of Microsoft’s 22,000-employee gaming division.

Another internal memo, written by Matt Booty, Microsoft’s game content and studios president, and seen by The Verge, said the layoffs are hitting “multiple” Blizzard teams, “including development teams, shared service organizations and corporate functions.” In January 2022, after plans for the merger were first announced, Bobby Kotick, then-CEO of Activision Blizzard, reportedly told employees at a meeting that Microsoft was “committed to trying to retain as many of our people as possible.”

Were these layoffs, particularly those targeting the newly acquired studios, always the plan? We obviously don’t know that currently. And, for what it’s worth, the video game industry in general is going through all kinds of layoffs across all kinds of studios and publishers. Still, it sends one hell of a message to Microsoft’s staff that it’s willing to spend tens and tens of billions of dollars on studios just to then turn around and lay off nearly a tenth of its workforce.

And when it comes to whether any part of this had always been part of the plan, Booty’s memo in particular is somewhat illuminating.

Booty’s memo said the job cuts announced today “reflect a focus on products and strategies that hold the most promise for Blizzard’s future growth, as well as identified areas of overlap across Blizzard and Microsoft Gaming.”

He claimed that layoffs would “enable Blizzard and Xbox to deliver ambitious games… on more platforms and in more places than ever before,” as well as “sustainable growth.”

I’ll leave that last bit of corporate pablum alone, as I think it mostly speaks for itself as a useless set of executive-speak. But I am interested in the bit where Microsoft had identified “areas of overlap.” Identified when, would be my question. Because I refuse to believe that in an acquisition as large and visible as this one, that Microsoft somehow didn’t tear into Activision Blizzard’s books when it came to workforce, what that workforce was doing, and so on. So the best answer I can come up with for Microsoft as to whether these layoffs were planned ahead of the deal being finalized is something like: “If it wasn’t, it should have been.”

But overall, and here I’ll borrow a phrase from our own Karl Bode, it sure seems like those “merger synergies” are really paying off!

Filed Under: competition, consolidation, jobs, layoffs, video games
Companies: activision blizzard, microsoft