Microsoft to cut 1,900 jobs in gaming division restructuring

WEB DESK: In a recent development, Microsoft is set to lay off approximately 1,900 employees across Activision Blizzard and Xbox this week, as reported by The Verge on Thursday.

This move is indicative of the ongoing ripple effects of last year’s widespread tech layoffs extending into 2024.

The reported job cuts, which account for around 8 per cent of the overall Microsoft Gaming division, are expected to primarily impact Activision Blizzard. An internal memo from Phil Spencer, the head of Microsoft’s gaming division, was cited as the source of this information.

As of now, Microsoft has not provided an official response to Reuters‘ request for comment on this matter.

Alongside the workforce reduction, Blizzard President Mike Ybarra and Chief Design Officer Allen Adham are also departing from the company. Additionally, a previously announced survival game by Blizzard has been cancelled, according to The Verge’s report.

This development follows Microsoft’s $69 billion acquisition of Activision Blizzard a few months ago, a strategic move aimed at bolstering its position in the highly competitive videogaming market.

The deal aimed to enhance Microsoft’s standing with best-selling titles like “Call of Duty,” positioning it to better compete with industry leader Sony.

The job cuts at Microsoft are part of a broader trend in the tech industry. In recent weeks, several major companies, including Alphabet, Amazon.com, and eBay, have undertaken significant staff layoffs as part of cost-cutting measures to improve profitability.

As of January, more than 21,000 workers have been laid off across 76 tech firms, as reported by the tracking website Layoffs.fyi.

The tech sector witnessed 168,032 job cuts in 2023, making it the industry with the highest number of layoffs, according to a report by Challenger, Grey, and Christmas earlier this month. Microsoft alone accounted for over 10,000 of those cuts.

Despite the ongoing job cuts, industry analysts anticipate a decrease in layoffs for the year ahead.

Companies investing heavily in artificial intelligence (AI) are likely to focus on downsizing to offset the substantial expenditures associated with advancing technology in this field.

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