In a significant development within the video game industry, Microsoft’s Gaming division has made the tough decision to lay off approximately 1,900 employees, affecting around 9% of its workforce.
This decision comes from restructuring efforts, particularly impacting Activision Blizzard, Xbox, and ZeniMax. Additionally, Blizzard president Mike Ybarra has chosen to depart from the company, and Blizzard’s chief design officer, Allen Adham, is also leaving. The layoffs and leadership changes are expected to notably impact the gaming landscape.
Mass layoffs in Microsoft’s gaming division
Microsoft Gaming CEO Phil Spencer announced the layoffs in an internal memo obtained by The Verge. The reduction in workforce is set to affect nearly 1,900 employees out of the 22,000-strong Microsoft Gaming team. The layoffs come as part of the company’s efforts to streamline operations and optimize its gaming division’s structure.
Spencer stated,
“The people 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.”
The affected employees face an uncertain future as they navigate this unexpected career turn.
A separate announcement revealed that Mike Ybarra, president of Blizzard within Microsoft’s Gaming division, will be leaving the company. Ybarra, who had a tenure of over 20 years with Microsoft, decided to exit following the cancellation of a major Blizzard survival game project. Microsoft’s acquisition of Blizzard led to Ybarra taking the helm as president, but with the project’s cancellation, he has chosen to move on.
Matt Booty, president of game content and studios at Microsoft, acknowledged Ybarra’s contribution, stating, “Now that he has seen the acquisition through as Blizzard’s president, he has decided to leave the company.” Ybarra’s departure marks a significant shift in leadership within the gaming division.
In addition to Ybarra’s exit, Blizzard’s chief design officer, Allen Adham, is also departing from the company. As one of Blizzard’s co-founders, Adham has substantially influenced the development of Blizzard’s games. While he leaves the company, Adham plans to continue mentoring young designers in the gaming industry, ensuring his legacy continues to impact future game developers.
With the cancellation of the Blizzard survival game project, Microsoft is now redirecting some of the affected employees to promising new projects in the early stages of development within the Blizzard portfolio. This move aims to utilize the talents and expertise of the affected workforce in innovative ways, ensuring that the company continues to thrive in the competitive gaming market.
Impact on the gaming industry
These developments within Microsoft’s Gaming division are poised to notably impact the video game industry. The layoffs and leadership changes reflect the dynamic and ever-evolving nature of the gaming business, where companies must adapt to market trends and streamline their operations to remain competitive.
While the departures of Mike Ybarra and Allen Adham mark the end of an era at Blizzard, it also signifies an opportunity for new leadership to step in and shape the future of the company’s gaming offerings. Additionally, the reshuffling of employees and resources to new projects signals Microsoft’s commitment to staying at the forefront of the gaming industry.
