The Verge has obtained an internal Microsoft memo that outlines a comprehensive reduction of headcounts across a number of Xbox Game Studios departments. Microsoft's gaming division has fought tooth and nail to complete their takeover of the highly prized (~$69 billion) Activision Blizzard + King group, yet this freshly acquired operation is set suffer the most. Microsoft Gaming CEO—Phil Spencer—was tasked with delivering some unfortunate news to an unlucky 8% of the current workforce: "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."

He continued: "As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1900 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."He signed off with: "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."

Spencer's executive colleague, Matt Booty (game content and studios president) chipped in with an update regarding a change of guard at Blizzard Entertainment: ""As many of you know, Mike Ybarra previously spent more than 20 years at Microsoft. Now that he has seen the acquisition through as Blizzard's president, he has decided to leave the company." Allen Adham, chief design officer at the house of Warcraft, Diablo etc. is another departing team leader. Booty elaborated: "As one of Blizzard's co-founders, Allen has had a broad impact on all of Blizzard's games. His influence will be felt for years to come, both directly and indirectly as Allen plans to continue mentoring young designers across the industry." Booty's statement mentions that a new Blizzard president will be revealed next week. He also confirmed that Blizzard's "previously announced survival game" is no longer in development; important decisions have been made: "shifting some of the people working on it to one of several promising new projects Blizzard has in the early stages of development."

We have observed an uptick in staff layoffs and shuttering of whole studios in recent months—mostly involving the Embracer Group's funding problems. It is a little bit shocking to see Microsoft (with its access to big budgets) implement a such a widespread redundancy initiative only a month into 2024. We send our best wishes to all of those affected by the late 2023 and early 2024 staff reductions.