Explained: Why Microsoft cut 1,900 jobs Activision Blizzard, Xbox

Explained: Why Microsoft cut 1,900 jobs Activision Blizzard, Xbox

Microsoft has announced a reduction in its workforce, letting go of 1,900 employees at Activision Blizzard and Xbox.

This downsizing marks the latest in a series of layoffs within the technology sector, extending a trend of substantial job cuts into 2024.

About 8 per cent of Microsoft’s Gaming division will be affected by these cuts, with the majority occurring at Activision Blizzard.

Blizzard President Mike Ybarra and Chief Design Officer Allen Adham are also leaving the firm.

Microsoft also revealed the cancellation of a previously announced survival game by Blizzard.

This development follows Microsoft’s completion of a $69 billion deal for Activision Blizzard a few months ago.

Why Microsoft chose to cut 1,900 jobs?

This acquisition is aimed at strengthening Microsoft’s position in the videogaming market, allowing it to compete more effectively with industry leader Sony by gaining access to popular titles like “Call of Duty.”

The Communications Workers of America (CWA) told Reuters that Microsoft’s decision to lay off 1,900 video game workers highlights the vulnerability of livelihoods in successful and highly profitable industries when employees lack a voice on the job.

Furthermore, the CWA expressed its commitment to ongoing support for workers at Microsoft and throughout the video game industry who aspire to establish a union voice in their workplace.

Microsoft’s move is part of a broader trend in the tech sector, where various companies, including Alphabet, Amazon.com, and eBay, have recently laid off thousands of employees.

These layoffs are driven by efforts to reduce costs and enhance profitability.

In January alone, over 21,000 workers have been laid off across 76 tech companies, according to Layoffs.fyi.

The tech sector saw a total of 168,032 job cuts in 2023, leading across industries in layoffs.

Microsoft itself accounted for over 10,000 of these cuts, according to a report by Challenger, Gray and Christmas.

While industry analysts anticipate fewer layoffs this year, they suggest that companies heavily investing in AI technology may still downsize to offset their significant spending.

The technology sector has been particularly affected, with layoffs becoming a common strategy for companies.

The Verge was the first to report Microsoft’s latest job cuts.