Microsoft laid off 1,900 employees or nearly 9% of the gaming division as part of the company's effort to reduce "areas of overlap."
The employee reduction came only three months after Microsoft successfully acquired Activision Blizzard.
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Activision Leaders Depart From Microsoft
In a memo obtained by CNBC, Microsoft CEO Phil Spencer explained that both companies have identified areas of overlap and priorities to move forward in 2024.
"As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1900 roles out of the 22,000 people on our team," the memo read. It was also hinted that the affected employees are from Activision Blizzard, ZeniMax, and Xbox teams.
Moreover, Former Blizzard president Mike Ybarra shared on X that he is officially leaving Blizzard and Microsoft. Likewise, Blizzard co-founder and unit's design chief Allen Adhan also bid farewell to the company.
Microsoft Offers Assistance to Affected Employees
On the other hand, Spencer assured that the impacted employees will be offered "full support" upon transition. Severance benefits by local employment laws will be given to them as well.
"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," he added.
Microsoft promised that the next months of 2024 will be focused on aligning its strategy and executing a plan with a sustainable cost structure to ensure the division's growth in the future.
Within a few weeks into 2024, several tech companies have started to lay off their workers due to expansion and realigning company strategy.
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