IGN has been informed by insiders that Microsoft is laying off 1,900 employees from its video game division.

Xbox CEO Phil Spencer stated that Microsoft will offer “full support to those who are impacted during the transition, including severance benefits informed by local employment laws” in a memo to employees that IGN was able to access. IGN has contacted Microsoft for an answer.

Following Activision Blizzard’s $69 billion acquisition of the Call of Duty franchise, there will be layoffs. At present, Microsoft has a market value above $3 trillion, making it the second firm to reach that milestone.

The entire memo from Spencer is available here:

The Activision, Blizzard, and King teams joined Microsoft a little over three months ago. The management teams of Activision Blizzard and Microsoft Gaming are dedicated to coordinating on an execution plan and strategy with a sustainable cost structure that will support our expanding company as we move forward in 2024. We’ve worked together to establish priorities, find areas of overlap, and make sure we all understand the best chances for professional development.

Out of the 22,000 people on our team, we have painfully decided to cut about 1,900 roles from our gaming staff as part of this process. Myself and the Gaming Leadership Team are determined to approach this process with the utmost consideration. The individuals who will be immediately affected by these layoffs have all contributed significantly to the achievements of the Xbox, ZeniMax, and Activision Blizzard teams, and they ought to be proud of what they have managed to accomplish together. We are appreciative of their endless inventiveness, enthusiasm, and hard work on behalf of our games, gamers, and coworkers.

We will offer anyone affected by the change our utmost assistance throughout, including severance benefits in accordance with regional employment regulations. We ask that you please treat your departing colleagues with the respect and compassion that is consistent with our values. Those whose roles will be affected will be informed.
“Going ahead, we’ll keep making investments in sectors that will expand our company and help us achieve our goal of making more games available to players worldwide. Even if our team is going through a challenging time, I have the utmost faith in your ability to develop the games, narratives, and environments that unite players.

President of Blizzard Entertainment Mike Ybarra made his departure from the firm known along with the layoffs. 2019 saw Ybarra, a former executive of Xbox, join Blizzard.

Allen Adham, a co-founder of Blizzard and chief design officer, is also departing from the company that created Overwatch, Diablo, and World of Warcraft. The long-developing survival game, Odyssey, has been canceled. Ybarra stated in December 2022 that the staff working on it has doubled from the previous year and that there are plans to grow the project even more.

Before employees were informed of the layoffs, a source told IGN that Microsoft’s gaming teams had already seen large reductions in their marketing budgets.

The announcement of the cuts follows a showcase that Xbox recently had, during which several future exclusive titles were shown off, including Ara: History Untold by Oxide titles, Avowed by Obsidian, Hellblade 2 by Ninja Theory, and Indiana Jones and the Great Circle by MachineGames. In an Xbox leadership shuffle last year, Sarah Bond was elevated to the position of president and Matt Booty to the position of president of game content and studios.

The video game industry is seeing a wave of layoffs, with several well-known studios reducing personnel or closing their doors. One of the most significant industry trends in 2023 and 2024 was the frequency of major layoffs, which stood in stark contrast to a year of massive video game hits. Estimates indicate that the number of individuals laid off in the gaming industry last year neared or exceeded 10,000, and 2024 doesn’t appear to be much better. However, precise data are difficult to find. One-third of all game developers were affected by layoffs last year, either personally or by seeing them occur at their company, according to a recent GDC survey of developers.