Microsoft has initiated a workforce reduction, affecting approximately 1,900 employees at both Activision Blizzard and Xbox. Although the majority of the layoffs are concentrated within the Activision Blizzard division, some employees from Xbox and ZeniMax are also expected to be impacted.

This decision translates to around 8 percent of the total Microsoft Gaming division workforce, which stands at approximately 22,000 employees. The layoffs were confirmed through an internal memo obtained by The Verge, authored by Microsoft Gaming CEO Phil Spencer.

Spencer emphasized the commitment of Microsoft Gaming and Activision Blizzard leadership to formulate a strategy and execution plan in 2024. The aim is to establish a sustainable cost structure supporting the growth of the entire business. The internal memo expressed the painful decision to reduce the gaming workforce by approximately 1,900 roles, with support provided to affected employees in the form of split benefits.

Blizzard President Mike Ybarra has decided to leave the company, marking the end of his tenure after more than 20 years at Microsoft. Matt Booty, Microsoft’s game content and studios president, conveyed this news in an internal memo and also announced the departure of Blizzard’s Chief Design Officer, Allen Adham.

The new Blizzard president would be named next week. He further revealed that Blizzard’s previously announced survival game has been canceled as part of the restructuring, with resources redirected to promising new projects in early development.

The layoffs at Microsoft come in the wake of similar workforce reductions announced by Riot Games, Google, Discord, Twitch, Unity, eBay, and others earlier this month.

These changes follow Microsoft’s $68.7 billion acquisition of Activision Blizzard in October, a deal that concluded after 20 months of regulatory challenges in the UK and US. The recent leadership adjustments at Xbox, including the promotion of Sarah Bond to Xbox president, demonstrate Microsoft’s ongoing efforts to streamline and optimize its gaming division.

The internal memo from Matt Booty provided a comprehensive overview of the changes and expressed gratitude to the departing employees for their contributions. The memo also emphasized Microsoft’s commitment to invest in areas fostering business growth and delivering quality gaming experiences to a global audience.