Bea Beltran Tech 01.23.2023 01:Jan AM EST

CEO Phil Spencer Says 10,000 Xbox Staff Layoffs were ‘Painful’

Phil Spencer, the CEO of Microsoft gaming expressed his sadness in an email sent to Xbox's employees. He mentioned that it has been a difficult week due to the "painful choices," but that it could benefit the company's long-term success for products and business.

What Came After the Job Cuts

Around 10,000 employees were impacted by the job cuts which were implemented in several Xbox studios on January 18th. That includes studious like 343 Industries, The Coalition, ZeniMax Media, and Bethesda Game Studios.

Spencer's email started by saying that it has been a difficult week for Microsoft and its teams. He reiterated that it was a challenging moment for the business and that the week's actions were painful choices, as mentioned in Eurogamer.

The decisions were made by the Gaming Leadership team or GLT, whereas they mentioned that the individual results of the decisions were real. They thank the recipients of the email for supporting their colleagues as they process the recent changes.

The email also mentioned that over the coming weeks, the company will connect and answer questions including the ones regarding the Monthly Gaming Update. Spencer mentioned that he was in close contact with teams at ZeniMax to offer support.

An employee at Xbox did not feel like the email was sincere, however. They said that the email felt like it was only sent out as an obligation. They added that the monthly gaming updates will not do anything to make anyone feel better, as mentioned in Kotaku.

Acquisition of Activision Blizzard

10,000 employees being laid off seems to align with the 10,000 employees that Activision Blizzard has, which according to Microsoft's blog post, they are planning to buy. It's a part of Microsoft's effort to grow its gaming business across mobile, PC, console, and cloud.

Microsoft announced its plans to acquire Activision Blizzard the same day that the layoffs were implemented. For $95 a share, the tech giant will be buying the video game company for a whopping $68.7 billion, including Activision Blizzard's net cash.

This will put Microsoft as the third-largest gaming company in revenue, alongside Tencent and Sony. Games like Warcraft, Diablo, Overwatch, Call of Duty, and Candy Crush will be part of the deal, as well as Major League Gaming activities.

Spencer stated that players everywhere love Activision Blizzard games, and their creative teams have their best work in front of them. Bobby Kotick, the video game company's CEO, will continue to lead the company even after Microsoft buys it.

Kotick expressed that Activision Blizzard's world-class talent along with Microsoft's technology, distribution, and access to talent, vision, and commitment, will help ensure success in an increasingly competitive industry.

It's also possible that they aim to bring PC and console games to mobile. The blog stated that 95% of players globally enjoy games on mobile. It also mentioned that with the two companies' partnership, they could enjoy franchises like Halo and Warcraft "virtually anywhere they want."