Microsoft to lay off 1,900 in gaming division

Microsoft is cutting about 1,900 jobs in its gaming division, including Xbox, ZeniMax and recently acquired Activision Blizzard, Microsoft Gaming CEO Phil Spencer said in a memo to employees Thursday.

The cuts will affect 8.6 percent of employees who work in gaming.

Spencer said Microsoft Gaming and Activision Blizzard leadership identified “areas of overlap” between the two companies and are aligned “on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business.”

Three months ago, Microsoft completed its $69 billion acquisition of “Call of Duty” maker Activision Blizzard, marking the largest acquisition in Redmond-based Microsoft’s history. The deal followed regulatory pushback.

The Federal Trade Commission moved to block the acquisition in December 2022, saying it would hurt competition in the video game industry because Microsoft could make Activision’s games exclusive to Xbox. The deal was ultimately approved after a federal district court judge sided with Microsoft and Activision.

Microsoft’s video gaming layoffs follow cuts at other companies including Riot Games, which laid off 530 employees on Monday, and Electronic Arts, which laid off 700 in March. Amazon’s Twitch, a streaming service mainly used by gamers, eliminated about 500 roles earlier this month.

Microsoft’s game content and studios president Matt Booty also said in an internal memo Thursday that Blizzard Entertainment President Mike Ybarra and design chief Allen Adham are leaving the company. The company also canceled a survival game called “Odyssey.”