Technology
Thursday, January 25th, 2024 4:49 pm EDT
Key Points
- Microsoft to Lay Off 1,900 Employees in Gaming Unit: Microsoft is set to lay off approximately 1,900 employees, constituting around 9% of Microsoft Gaming’s headcount. The layoffs are part of a broader “execution plan” aimed at reducing areas of overlap, following Microsoft’s acquisition of Activision Blizzard, which closed over three months ago.
- Leadership Commitment and Support: Microsoft Gaming CEO Phil Spencer emphasized the commitment of Microsoft Gaming and Activision Blizzard leadership to align on a strategy and execution plan with a sustainable cost structure. Despite the painful decision to reduce the gaming workforce, the company pledged full support, including location-dependent severance, to all affected employees. The leadership team is focused on navigating the process thoughtfully and providing support during the transition.
- Investment in Growth and Strategy: Looking ahead, Microsoft plans to continue investing in areas that will foster business growth and support the strategy of bringing more games to a global audience. The company remains confident in its team’s ability to create and nurture games, stories, and worlds that bring players together. The announcement comes amid a broader trend of layoffs in the tech industry, with various companies making strategic adjustments to enhance efficiency and profitability in the face of economic pressures.
Microsoft is set to lay off approximately 1,900 employees in its Gaming unit, constituting about 9% of Microsoft Gaming’s workforce. The layoffs come as part of a broader “execution plan” aimed at reducing areas of overlap, following Microsoft’s $69 billion acquisition of Activision Blizzard. Phil Spencer, the CEO of Microsoft Gaming, emphasized that the company is committed to aligning on a strategy and execution plan with a sustainable cost structure to support its growing business. The job cuts, though painful, are expected after major mergers like this one. The acquisition of Activision Blizzard was Microsoft’s largest ever, more than doubling the size of its 2016 purchase of LinkedIn. Former Blizzard president Mike Ybarra also announced his departure from Microsoft and Blizzard. Microsoft shares remained largely flat following the news, with investors expecting efficiency improvements after mergers. The tech industry has seen significant layoffs in 2024, with companies like Tencent-owned Riot Games, TikTok, and Discord making cuts unrelated to mergers. The move aligns with broader trends in the tech sector, where companies are making strategic adjustments to enhance efficiency and profitability amid economic pressures. Microsoft has pledged full support, including location-dependent severance, to the affected employees during the transition. The company is focusing on investments in areas that will foster business growth and further its strategy of reaching more players globally. Despite the challenging moment for the team, Phil Spencer expressed confidence in their ability to create and nurture games, stories, and worlds that bring players together. The full extent of the layoffs follows a challenging 2023, which saw over 100,000 tech workers laid off. Other tech companies, such as eBay and SAP, have also announced layoffs recently, leading to varied reactions in their share prices. While eBay and SAP experienced a significant bump in share prices, Microsoft’s response is yet to be seen, and the company did not immediately respond to CNBC’s request for comment.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/25/microsoft-lays-off-1900-workers-nearly-9percent-of-gaming-division-after-activision-blizzard-acquisition.html
