Video game companies are experiencing a string of brutal layoffs lately, including Microsoft, which has announced that 1,900 of its employees will be let go.

The cuts will affect various roles within the company, cutting 8% of its gaming division which stands at around 22,000 employees in total. These include Activision Blizzard, Xbox, and several ZeniMax employees. Xbox boss Phil Spencer has confirmed the news in an internal memo:

“It’s been a little over three months since the Activision, Blizzard, and King teams joined Microsoft. As we move forward in 2024, the leadership of Microsoft Gaming and Activision Blizzard is committed to aligning on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business. Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth.

“As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1,900 roles out of the 22,000 people on our team. The Gaming Leadership Team and I are committed to navigating this process as thoughtfully as possible. The people who are directly impacted by these reductions have all played an important part in the success of Activision Blizzard, ZeniMax and the Xbox teams, and they should be proud of everything they’ve accomplished here. We are grateful for all of the creativity, passion and dedication they have brought to our games, our players and our colleagues. We will provide our full support to those who are impacted during the transition, including severance benefits informed by local employment laws. Those whose roles will be impacted will be notified, and we ask that you please treat your departing colleagues with the respect and compassion that is consistent with our values.

“Looking ahead, we’ll continue to invest in areas that will grow our business and support our strategy of bringing more games to more players around the world. Although this is a difficult moment for our team, I’m as confident as ever in your ability to create and nurture the games, stories and worlds that bring players together.

“Phil.”

The news came after Microsoft acquired Activision Blizzard for $68.7 billion. Microsoft now owns more than $3 trillion in market capitalization, making it only the second company in history to reach this milestone.

In addition to the layoff, the president of Blizzard Entertainment, Mike Ybarra, has announced that he will be departing from the company. Ybarra, who previously spent over 20 years at Microsoft, joined Blizzard in 2019. According to an internal memo from Microsoft’s game content and studios president, Matt Booty, Ybarra has decided to step down from his position after overseeing the acquisition process.

I want to thank everyone who is impacted today for their meaningful contributions to their teams, to Blizzard, and to players’ lives. It’s an incredibly hard day and my energy and support will be focused on all those amazing individuals impacted – this is in no way a reflection…

— Mike Ybarra ? (@Qwik) January 25, 2024

Microsoft is planning to announce the appointment of a new president for Blizzard Entertainment next week. This announcement follows the news that Blizzard’s chief design officer, Allen Adham, will be leaving the company.

Allen Adham, who is one of Blizzard’s co-founders, has had a significant impact on all of the company’s games. His influence will continue to be felt in the years to come, both directly and indirectly, as he plans to continue mentoring young designers across the industry.

Microsoft has announced that Blizzard’s previously announced survival game dubbed Odyssey has been cancelled. However, Blizzard has several promising new projects in development that will take some of the employees working on it.

The acquisition of Activision Blizzard by Microsoft for $68.7 billion was completed in October, following a lengthy process of obtaining regulatory approval in the UK and the US. The former CEO, Bobby Kotick, stepped down from his position at the end of the year, concluding a 20-month period during which the company faced various regulatory challenges. However, Microsoft opted not to appoint a direct replacement for Kotick and instead delegated responsibility to Matt Booty, who now oversees a group of Activision Blizzard executives.