Microsoft Plans to Lay Off 1,900 Employees Across Activision Blizzard and Xbox
Despite being less than a month into 2024, thousands of video game industry workers have already lost their jobs. Now Microsoft is joining the depressing trend as it plans to lay off 1,900 employees across Activision Blizzard and Xbox this week—despite just becoming the second company ever to hit a $3 trillion valuation.
Layoffs Concentrated in Activision Blizzard Division
Most of the layoffs, which make up about 8% of Microsoft’s gaming division of 22,000 employees on the whole, will occur within its Activision Blizzard division—which the tech giant finally acquired for $69 billion after a lengthy regulatory battle three months ago.
Survival Game Canceled and Executives Leaving
Blizzard’s upcoming survival game has now been reportedly canceled, and Blizzard President Mike Ybarra and Chief Design Officer Allen Adham are among the executives leaving the company. However, Blizzard apparently still has other games in development, and those remaining who were assigned to the now-dead game will be moved to other departments.
Severance and Benefits for Laid-Off Employees
In an internal memo, Xbox head Phil Spencer stated that Microsoft will provide the laid-off employees with severance and other benefits depending on “local employment laws.” The company plans to “continue to invest in areas that will grow our business,” but did not specifically state what some of those areas might be.
Criticism Over AI-Powered Game Development Toolkit
Xbox recently invested in an AI-powered game development toolkit late last year, which video game talent heavily criticized over fears that such tools would lead to layoffs and poorer-quality games. Microsoft’s AI gaming push has also been heavily criticized by gamers themselves. And Blizzard is reportedly experimenting with AI to design future game characters.
Union Response and Concerns About Layoffs
National union group Communications Workers of America called the layoffs a clear sign that “even when you work at a successful company in an extremely profitable industry, your livelihood is not protected without a voice on the job,” Reuters reported. The CWA pledged to support workers who want to have a union voice on the job.
Rise of Layoffs in the Video Game Industry
While it’s unclear to what extent Microsoft’s love for AI led to its latest round of layoffs, the rise of generative AI tools has undoubtedly led to growing concerns around the onslaught of layoffs in 2023. It’s difficult to prove causation in many cases, but the correlation has proven disturbing to many industry workers.
Hot Take: Gaming Industry Faces Ongoing Layoff Crisis
The video game industry is facing an ongoing crisis as major companies like Microsoft continue to lay off employees despite their financial success. Layoffs have become increasingly common, raising concerns about job security and the impact of AI technology on the industry. While some employees will receive severance and benefits, the lack of protection without union representation is evident. The rise of generative AI tools adds another layer of uncertainty for industry workers. As thousands of jobs are lost within just a few weeks, it’s clear that more needs to be done to address these issues and protect the livelihoods of those working in the gaming industry.
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