In a significant move within the tech industry, Microsoft (NASDAQ: MSFT) has confirmed plans to undertake a major restructuring in its gaming division. This decision, affecting nearly 9% of the division’s workforce, comes in the wake of Microsoft’s acquisition of Activision Blizzard. This highlights the company’s efforts to streamline operations and address redundancies.
According to a memo obtained by CNBC on Thursday, Microsoft Gaming CEO Phil Spencer announced the impending layoffs. It signals a significant shake-up within the gaming division. In the aftermath of the Activision Blizzard acquisition, Microsoft is set to restructure, affecting approximately 1,900 employees. This move underscores Microsoft’s commitment to optimizing efficiency and resource allocation.
Alongside the announcement of layoffs, notable executives within the gaming division, including former Blizzard President Mike Ybarra and Blizzard co-founder Allen Adham, have revealed their departures from Microsoft. The confirmation of Ybarra’s departure came through social media platform X (formerly Twitter). The Verge reported on details of Adham’s exit outlined in a memo from Matt Booty, head of Microsoft’s gaming studios.
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https://twitter.com/Qwik/status/1750527310493868293
Market impact of Microsoft’s decision
As part of the restructuring, Booty also confirmed that Blizzard would cease development on a new survival game. This decision highlights Microsoft’s commitment to consolidating resources and focusing on key initiatives to drive growth and innovation in the competitive gaming market.
Microsoft has pledged to provide full support, including location-dependent severance packages, to employees affected by the layoffs. Despite the significant reduction in the workforce, the company’s shares remained relatively stable following the announcement, with market analysts attributing this to the anticipated impact of restructuring efforts post-acquisition.
The announcement of layoffs at Microsoft is part of a broader trend of workforce reductions within the tech industry. Other major companies, including eBay and SAP, have also announced significant layoffs in recent weeks. It reflects ongoing economic pressures and a drive for increased operational efficiency.
As Microsoft embarks on its restructuring journey in the gaming division, the company remains focused on driving long-term growth and profitability in the rapidly evolving gaming industry. The layoffs represent a challenging period of transition for affected employees. However, Microsoft’s strategic realignment of resources underscores its commitment to remaining competitive and innovative in the dynamic gaming market landscape.
zartasha@mugglehead.com
