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After acquiring Activision Blizzard for $69 billion, Microsoft will cut 1,900 jobs in its video game divisions, according to IGN.
Microsoft’s CEO for gaming, Phil Spencer, announced the layoffs in an internal memo that mentioned creating a “sustainable cost structure” for the company’s gaming business.
“As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1,900 roles out of the 22,000 people on our team,” Spencer wrote.
According to the memo, the layoffs impact employees at Xbox, Activision Blizzard, and Zenimax, which runs Bethesda Softworks, Arkane Studios, and MachineGames.
“Looking ahead, we'll continue to invest in areas that will grow our business and support our strategy of bringing more games to more players around the world,” Spencer added. “Although this is a difficult moment for our team, I'm as confident as ever in your ability to create and nurture the games, stories and worlds that bring players together.”
On the same day, Blizzard Entertainment President Mike Ybarra also announced he’s stepping down. He previously worked as an Xbox executive before joining Blizzard. “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,” he tweeted.
Microsoft is laying off employees even though the company briefly reached $3 trillion in value this week. Major companies across the IT sector—including Google, Amazon, and Riot Games— have all been initiating layoffs to cut costs. Earlier this week, eBay announced it was laying off 9% of the company’s full-time employees, explaining “our overall headcount and expenses have outpaced the growth of our business.”