Microsoft announces 1,900 layoffs affecting Xbox and Activision Blizzard, cancels survival game

Early in the morning of January 25, 2024, Microsoft announced it is set to lay off 1,900 employees from its gaming divisions. While Xbox and Zenimax/Bethesda have been affected by this, Activision Blizzard is the main target of these cuts.

As reported by The Verge, the wave of firings are equivalent to roughly 8% of the total workforce of Microsoft Gaming, which includes the many studios they have acquired over the years. An internal memo from Microsoft Gaming CEO Phil Spencer confirmed the situation, admitting that it’s only been three months since the acquisition of Activision Blizzard King, but also announcing their plans to restructure the companies “with a sustainable cost structure that will support the whole of our growing business”.

What do these new lay offs mean for Activision Blizzard games?

Matt Booty, head of Xbox Studios, also sent a note to staff with more details about what this situation ensues, and sadly the most immediate effect is the complete cancellation of their previously announced new IP, a fantasy survival game that was set to be the first new universe from Blizzard since they released Overwatch back in 2016.

“Today’s actions affect multiple teams within Blizzard, including development teams, shared service organizations and corporate functions,” says Booty in his message to the many Xbox Studios. As part of this focus, Blizzard is ending development on its survival game project and will be shifting some of the people working on it to one of several promising new projects Blizzard has in the early stages of development.”

Full screen

In addition to all of this, Blizzard president Mike Ybarra has also decided to leave the company behind. This was also announced by Booty: “As many of you know, Mike previously spent more than 20 years at Microsoft. Now that he has seen the acquisition through as Blizzard’s president, he has decided to leave the company.”

The state of the AAA gaming industry is not good

We’re only in late January, and yet we’ve seen thousands of layoffs come to the gaming industry. Just this past week Riot Games announced over 500 layoffs in an effort to focus their output to less productions, thankfully accompanied by very decent severance packages for its employees, but that is never a guarantee for many of the affected developers that will suddenly find themselves without a job, putting them and their families at risk.

Rami Ismail, renowned consultant of the industry, shared a review of the situation so far in 2024, and the numbers are not good: “With todays’ Activision-Blizzard/Microsoft layoffs added, in just 25 days of 2024 we’re already at over HALFWAY to the total layoffs of ALL OF 2023 (5,600 versus 10,500)”

More than the loss of new games and entertainment, our hopes go towards those affected to swiftly find new employment opportunities and land on their feet.