Image: Xbox
Blizzard president Mike Ybarra leaves as the company gets gutted by more layoffs following Activision-Blizzard’s merger with Microsoft.
Microsoft has announced that it’s laying off 1,900 workers from its gaming division at Xbox Game Studios, with the majority of these layoffs affecting Activision-Blizzard. In the wake of these layoffs, Blizzard president Mike Ybarra announced that he was leaving the company, physical Xbox game production departments have been shut down, and Blizzard’s untitled survival game has been cancelled.
Microsoft, meanwhile, hit $3 trillion in stock market value this week.
Microsoft fires Activision-Blizzard staff
Head of Xbox Game Studios Phil Spencer sent out a memo to Microsoft Gaming staff this week, announcing that 1,900 staff would be laid off after Microsoft and Activision-Blizzard, “set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth.” Spencer called the decision to fire 1,900 out of 22,000 members of Microsoft Gaming staff, “painful,” and reaffirmed that the company would navigate, “this process as thoughtfully as possible.”
Thoughtful is not the word that comes to mind when speaking about these mass layoffs, however, as Twitter/X has been flooded with members of Microsoft Gaming expressing disappointment at their abrupt departure from the company. Bloomberg’s games industry reporter Jason Schreier even tweeted that Activision-Blizzard staff were texting him to figure out if they would be impacted by the layoffs, as most staff had not been contacted after Spencer’s memo was released to the company. They had to sit in cruel suspense as colleagues dropped like flies around them.
Spencer wrote in his memo:
The people who are directly impacted by these reductions have all played an important part in the success of Activision Blizzard, ZeniMax and the Xbox teams, and they should be proud of everything they’ve accomplished here. We are grateful for all of the creativity, passion and dedication they have brought to our games, our players and our colleagues. We will provide our full support to those who are impacted during the transition, including severance benefits informed by local employment laws. 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.
Spencer ended the memo with a misplaced bit of optimism, saying that Microsoft plans to continue investing in the growth of its business and is, “as confident as ever in your ability to create and nurture the games, stories and worlds that bring players together.” This, perhaps, was not the statement most Activision-Blizzard staff expected to hear at the start of the year.
How these layoffs have already impacted Blizzard
While it took some time for the consequences of these layoffs to start rolling out across Activision-Blizzard, we now know that Blizzard president Mike Ybarra is stepping down from the company. Ybarra posted on Twitter/X, saying, “Having already spent 20+ years at Microsoft and with the acquisition of Activision Blizzard behind us, it’s time for me to (once again) become Blizzard’s biggest fan from the outside.”
Microsoft has also cancelled Activision Blizzard’s mystery survival game, which Bloomberg attributed to development problems over 100-player maps and a troublesome game engine. The company is reportedly shifting focus towards one of several new games Blizzard has in early development. The Overwatch 2 development team has also been impacted by these layoffs, specifically staff working on lore and PvE content for the game. Call of Duty: Modern Warfare 3 developer Slegehammer Games has reportedly also lost 30% of its workforce.
Microsoft has also shut down departments dedicated to producing retail copies of Xbox Series X|S games. This, and a recent leak of a digital-only Xbox Series X refresh, indicates that the company is looking to move beyond physical game production and focus on digital-only copies.