Microsoft lays off 1900, Mike Ybarra and Allen Adham step down

[Undead Warrior]

The Verge reports on layoffs at Microsoft primarily from ABK but also hitting Zenimax and XBox divisions.

“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 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.

“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 internal memo about the cuts.

“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 on your amazing work. If there’s anything I can help with, connections, recommendations, etc., DM me.

“To the Blizzard community: I also want to let you all know today is my last day at Blizzard. Leading Blizzard through an incredible time and being part of the team, shaping it for the future ahead, was an absolute honor. Having already spent 20-plus years at Microsoft and with the acquisition of Activision Blizzard behind us, it’s time for me to (once again) become Blizzard’s biggest fan from the outside.

“To the incredible teams at Blizzard—thank you. Words can’t express how I feel about all of you. You are amazing. Continue to do incredible things and always keep Blizzard blue and the player at the forefront of every decision.

“To all of those impacted today—I am always available to you and understand how challenging today’s news is. My heart is with each one of you.”

Mike Ybarra's message to the team at Blizzard.


Not necessarily surprised at the slicing down of ABK, but confused at Ybarra stepping down so quickly. We're now at something lik 80% of 2023's layoff total and it ain't even Februrary...

 

[enpleinjour]

Holy shit, the Blizzard game got cancelled after 6 years of dev. Wasn't this supposed to be one of the big exclusives from the acquisiton.
At this rate, what exclusives will even come out of this acquisition? COD, OW2, D4 are all multiplat.

Also, it feels like there is something seriously going wrong with Xbox division.

Total Xbox layoffs:
2022 : 500
2023: ~300+
2024: 1900

Total so far: 2700

To put that into perspective, that is approx the entire size of Bethesda.
The only other gaming company afaik that has laid off more people is Unity, a company in very a dire situation and Xbox number is on par with that.

 

[Remember_spinal]

Holy shit, the Blizzard game got cancelled after 6 years of dev. Wasn't this supposed to be one of the big exclusives from the acquisiton.
At this rate, what exclusives will even come out of this acquisition? COD, OW2, D4 are all multiplat.

Also, it feels like there is something seriously going wrong with Xbox division.

Total Xbox layoffs:
2022 : 500
2023: ~300+
2024: 1900

Total so far: 2700

To put that into perspective, that is approx the entire size of Bethesda.
The only other gaming company afaik that has laid off more people is Unity, a company in very a dire situation and Xbox number is on par with that.

How many people have embracer laid off?

 

[Jimmy Joe]

I'm less concerned with how this affects the software output for Microsoft, and more concerned with how vain the hopes and endorsements of labour unions were leading up to this acquisition

This is going to end up being an object lesson about the disposability of labour when weighed on the scales of quarterly profits, and it makes me sick to my stomach

 

[Aostia82]

Hope the best to everyone that soon will be without a job..

 

[Lelouch0612]

The Acquisition leading to layoffs was expected but not to that extent. They are gutting a big chunk of their workforce and killing projects with potential.

May I remind them that the most popular game right now is a Survival game?

Incredibly shortsighted in many ways, but that's how many of the American firms operate regarding their workforce.

 

[Jimmy Joe]

These Xbox layoffs are such a mess that staff across Activision Blizzard are texting *me* to try to find out if they might be impacted. Nearly 2,000 job cuts and people now just have to wait around to see if they're part of the bloodbath

Utterly unconscionable and for some reason I'm getting angrier and angrier at the idea that people believed this was going to be a win for labour, as if the consolidation of mega corps ever produced anything but tragedy

I need to cool off

 

[Undead Warrior]

I'm less concerned with how this affects the software output for Microsoft, and more concerned with how vain the hopes and endorsements of labour unions were leading up to this acquisition

This is going to end up being an object lesson about the disposability of labour when weighed on the scales of quarterly profits, and it makes me sick to my stomach

Only the QA team were the ones unionizing, to be fair. Now, if it turns out they laid THEM off too.... then yeah, bring out the guillotines.

 

[Lelouch0612]

Utterly unconscionable and for some reason I'm getting angrier and angrier at the idea that people believed this was going to be a win for labour, as if the consolidation of mega corps ever produced anything but tragedy

I need to cool off

Insanity, how can you even expect people to deliver in these conditions ?

Or as some wise man said it:

If we reduce the number of employees for better short-term financial results, employee morale will decrease. I sincerely doubt employees who fear that they may be laid off will be able to develop software titles that could impress people around the world.

 

[Joseki]

Management at Xbox has been an issue for more than a decade now, not surprised by the reshuffling.

 

[Evilnemesis8]

The Acquisition leading to layoffs was expected but not to that extent. They are gutting a big chunk of their workforce and killing projects with potential.

May I remind them that the most popular game right now is a Survival game?

Incredibly shortsighted in many ways, but that's how many of the American firms operate regarding their workforce.

Jason has said that he'll tell us more about what was going on with Odyssey after 6 years.
I must admit, I'm intrigued, especially considering the timing.

 

[Lelouch0612]

Jason has said that he'll tell us more about what was going on with Odyssey after 6 years.
I must admit, I'm intrigued, especially considering the timing.

New Jason report soon indeed, but apparently the game wouldn't have released before a few years still.

 

[Jimmy Joe]

Only the QA team were the ones unionizing, to be fair. Now, if it turns out they laid THEM off too.... then yeah, bring out the guillotines.

I'm referring to how the Communication Workers of America gave a full-throated endorsement of the merger in the hopes that it would "give workers a seat at the table when it comes to mergers and acquisitions" https://www.bnnbloomberg.ca/microsoft-s-union-ally-pushes-ftc-for-activision-merger-deal-1.1866169

This is separate from Microsoft saying they would recognize the unions forming at A-B, because labour isn't just unions, and 1900 people losing their jobs is still a catastrophe that flies in the face of the assurances of CWA leadership

 

[Evilnemesis8]

New Jason report soon indeed, but apparently the game wouldn't have released before a few years still.

I've been playing Blizzard games ever since Warcraft 2 and Blizzard has been ahead of the curve when it comes to long development times.

Blizzard was even doing the Blizzard Soon™ joke back during the Starcraft 2 / Diablo 3 days.

Rest of the industry might be going into 5-6 years dev times.
Blizzard feels like they're in the 7-8~ year range, and when you consider their location, that's a lot of costs here.
I don't see how you change that very quickly though, it feels baked into the company culture at this point in time.

 

[J.T.]

Microsoft is so awful for this industry.

 

[enpleinjour]

How many people have embracer laid off?

Hard to know exactly since many don't report the numbers , but from the most that do:

Embracer layoffs, 2022-4:
~1250-1500

I'm less concerned with how this affects the software output for Microsoft, and more concerned with how vain the hopes and endorsements of labour unions were leading up to this acquisition

This is going to end up being an object lesson about the disposability of labour when weighed on the scales of quarterly profits, and it makes me sick to my stomach

This is well known in anti-trust circles and regulators even warned the public about it. Corporations are now doing "deals" with Labour union leaders to endorse their anti-competitive acquisition in hopes for it being more politically favourable and getting less pushback from politicians and courts.

Heck the CWA leaders went so far as it file documents to the CMA and US Judge on why this merger should go through and is good for workers.

Another US merger, horrible for workers, Albertson-Kroger, had a leading union go bat for it and say its good for workers even though everyone knows it will lead to huge power concentration and tons of layoffs.

 

[SoonyXboneUhh]

I've been playing Blizzard games ever since Warcraft 2 and Blizzard has been ahead of the curve when it comes to long development times.

Blizzard was even doing the Blizzard Soon™ joke back during the Starcraft 2 / Diablo 3 days.

Rest of the industry might be going into 5-6 years dev times.
Blizzard feels like they're in the 7-8~ year range, and when you consider their location, that's a lot of costs here.
I don't see how you change that very quickly though, it feels baked into the company culture at this point in time.

If you look at Activision Blizzard King and compare their overall workforce and money being made, Blizzard is lot more bloated than Activision or King

 

[Jin+Jang]

Holy shit, the Blizzard game got cancelled after 6 years of dev. Wasn't this supposed to be one of the big exclusives from the acquisiton.
At this rate, what exclusives will even come out of this acquisition? COD, OW2, D4 are all multiplat.

Also, it feels like there is something seriously going wrong with Xbox division.

Total Xbox layoffs:

2024: 1900

1900 roles. Is that the same number as employees?

 

[Astandahl]

I really don't understand how managers expected growth rate to stay the same as pre covid after 2 years of like plus double-digit increase.
How can they expect to keep growing at 6-7% after Covid years in which they grew like 18-20% ?

They massively over hired and now we are seeing a colossal correction.

 

[Lelouch0612]

I really don't understand how managers expected growth rate to stay the same as pre covid after 2 years of like plus double-digit increase.
How can they expect to keep growing at 6-7% after Covid years in which they grew like 18-20% ?

They massively over hired and now we are seeing a colossal correction.

Employees are incentivized on company goals. Said company won't set the goal at +0% when you did +20% the previous year, both toward their shareholders and upper management.

So you end up expecting things to continue just like before, because they don't know which part of the growth is coming from the macro context and which is coming from their own doing.

Tricky thing with Covid is that things didn't slow down after lockdowns but well after, toward 2022.

 

[unkindlynice]

This is unsurprising. Microsoft has been buying up publishers and there’s zero reason for them to have multiple publishing arms.

Incredibly shortsighted in many ways, but that's how many of the American firms operate regarding their workforce.

It’s more the size; these things will come down from the top and they don’t care about the nuance.

 

[Celine]

Or as some wise man said it: "If we reduce the number of employees for better short-term financial results, employee morale will decrease. I sincerely doubt employees who fear that they may be laid off will be able to develop software titles that could impress people around the world."

And the same wise man took a 50% pay cut and the company management as a whole followed with smaller cuts so to safeguard the working force.
He was the CEO of the most profitable console manufacturer in the World.

 

[cw_sasuke]

Horrible news, hope anyone effected lands on their feet somehow.

Edit.

Sorry i edited my post again, since i rather not have us to waste time on what goes on at other places. Just be safe out there, in terms how critical you voice your opinion when it comes to this news on places outside of IB.

 

[Godzilla]

Funny this happens when Microsoft is ONCE AGAIN the biggest company in the world overtaking Apple.

Capitalism, i guess.

 

[balgajo]

Or as some wise man said it:

Such a legend. Couldn't be more right.

 

[Astandahl]

Employees are incentivized on company goals. Said company won't set the goal at +0% when you did +20% the previous year, both toward their shareholders and upper management.

So you end up expecting things to continue just like before, because they don't know which part of the growth is coming from the macro context and which is coming from their own doing.

Tricky thing with Covid is that things didn't slow down after lockdowns but well after, toward 2022.

Of course, but you can't realistically expect previous growth rate after 2 unique years in which sales were massively impacted by an external factor (pandemic).

Being a bit bullish due to potential bonuses is one thing, but they have fucked up massively this time and now we are seeing a huge correction.

 

[InsaneZero]

And the same wise man took a 50% pay cut and the company management as a whole followed with smaller cuts so to safeguard the working force.
He was the CEO of the most profitable console manufacturer in the World.

Nintendo is a company that has survived for over a century and through multiple significant financial crises, all while being relatively tiny compared to similarly long lasting businesses that had become major institutions. These extreme circumstances necessitated a conservative operational model in order to continue existing, since the risk of overextending beyond their means could result in the company collapsing entirely. This also meant that the employees that they did hire were extremely valuable to the company, since the company wouldn't want to spend their limited capital on personnel that they didn't intend to keep around for long.

This mindset that prioritizes the company's long term sustainability over immediate profitability is extremely difficult to cultivate in the modern business environment that significantly incentivizes the latter over the former. Nintendo is this unique case in which the company's history required focusing on sustainability for their survival, and that mindset has allowed them to mitigate the damage currently being felt in the industry today.

Microsoft, on the other hand, is very much a typical business that prioritizes profitability, and they had increased employee count significantly to capitalize on the economic opportunity provided by COVID. Unfortunately, this is a very reactive strategy that is extremely vulnerable to changes in market conditions, and the conditions introduced by the pandemic couldn't go on forever. Humanity has survived numerous society-crippling pandemics before and have advanced their scientific understanding to combat those diseases, so things were going to go back to "normal" eventually. The increased volatility and uncertainty caused by various world events and the increased interest rates definitely exasperated operational costs, but reduction in headcount would've occurred regardless.

 

[Old sorta fan]

Microsoft is both incompetent and soulless when it comes to video games. I wish they would just leave the market as they don't know what they are doing and don't seem to even make profit.

 

[Himura Kenshin]

Also dont be too critical of MS and this move at the old place, its gonna likely get you banned.

Being critical of a three trillion dollar company who just made a 70 billion dollar purchase and are now laying off many people from said purchase gets you banned?

 

[Bernd Lauert]

Holy shit, the Blizzard game got cancelled after 6 years of dev. Wasn't this supposed to be one of the big exclusives from the acquisiton.
At this rate, what exclusives will even come out of this acquisition? COD, OW2, D4 are all multiplat.

Also, it feels like there is something seriously going wrong with Xbox division.

Total Xbox layoffs:
2022 : 500
2023: ~300+
2024: 1900

Total so far: 2700

To put that into perspective, that is approx the entire size of Bethesda.
The only other gaming company afaik that has laid off more people is Unity, a company in very a dire situation and Xbox number is on par with that.

Xbox added roughly 19000 people from Zenimax and ABK combined. Layoffs also happened at pretty much every tech company after covid and 10+ years of 0% interest rates. I don't really see anything out of the ordinary here.

 

[Jin+Jang]

I don't really see anything out of the ordinary here.

I can see. Was read that MS/ABK thread when merge was in the process and now here. The amount of cheerleading for acquisition was astonishing. And these people ( like you) are now acting like it is all normal. Sorry, but that's lame and pathetic
Mat Piscatella also pointed finger at that kind of people who were for ABK acquisition. Sadly, he deleted the tweet.

 

[Bernd Lauert]

And these people ( like you) are now acting like it is all normal.

Look at the state of the gaming industry. Welcome to the new normal.

 

[Jin+Jang]

Being critical of a three trillion dollar company who just made a 70 billion dollar purchase and are now laying off many people from said purchase gets you banned?

Yes. Surely it won't be only ban. This post sums it up

[IGN] Microsoft Lays Off 1,900 Staff From Its Video Game Workforce

https://www.resetera.com/threads/windowscentral-embracer-group-is-showcasing-the-dangers-of-irresponsible-consolidation.807513/ https://www.resetera.com/threads/embracers-phil-roberts-human-cost-of-restructure-is-significant-but-necessary-games-industry-biz.788076/...

www.resetera.com

 

[Aostia82]

Horrible news, hope anyone effected lands on their feet somehow.

Edit.

Also dont be too critical of MS and this move at the old place, its gonna likely get you banned.

no cross-site drama
but man..what!?

 

[Jin+Jang]

Look at the state of the gaming industry. Welcome to the new normal.

Surely it wouldn't be that kind of layoffs if ABK wasn't bought

 

[Lelouch0612]

Friendly reminder to not engage in cross-site drama please

 

[Bernd Lauert]

Surely it wouldn't be that kind of layoffs if ABK wasn't bought

Sure, a part of the layoffs will be redundancies that came with the mergers. I bet it's a small part though. The big part is the market situation.

 

[Undead Warrior]

Surely it wouldn't be that kind of layoffs if ABK wasn't bought

No, ABK would absolutely be laying off tons of staff right about now if the merger hadn't gone through. They, like so many others, just expanded way too much on cheap credit and now they're on the hook. I see the comparisons to Nintendo above, but they never expanded as quickly as all these companies did. Even now, when they're constructing a whole ass building to house the staff they plan to expand with, they're still doing it slowly and methodically. Unsustainable growth and expansion will always result in damage like this.

 

[awng782]

Layoffs were to be expected after the ABK acquisition but the number of people affected is way higher than expected.

Barely a week after the Developer Direct too, brutal.

 

[MrTired]

I'm less concerned with how this affects the software output for Microsoft, and more concerned with how vain the hopes and endorsements of labour unions were leading up to this acquisition

This is going to end up being an object lesson about the disposability of labour when weighed on the scales of quarterly profits, and it makes me sick to my stomach

Hard to know exactly since many don't report the numbers , but from the most that do:

Embracer layoffs, 2022-4:
~1250-1500



This is well known in anti-trust circles and regulators even warned the public about it. Corporations are now doing "deals" with Labour union leaders to endorse their anti-competitive acquisition in hopes for it being more politically favourable and getting less pushback from politicians and courts.

Heck the CWA leaders went so far as it file documents to the CMA and US Judge on why this merger should go through and is good for workers.

Another US merger, horrible for workers, Albertson-Kroger, had a leading union go bat for it and say its good for workers even though everyone knows it will lead to huge power concentration and tons of layoffs.

Would recommend people Subscribe to Matt Stoller Substack Big if there interested corporate consolidation & monopolies. It was one of the reasons I was against the acquisition.

 

[Xevross]

Man, fuck this. The system is completely broken.

Embracer and Xbox having the biggest layoffs is a big warning sign against consolidation. It's always the big companies that are expected to break records every year that hurt the people who work for them.

When times are good execs and shareholders rake it in, when times are still pretty good but somewhat uncertain thousands of people at the bottom have their income they need to live taken away.

 

[Astrogamer]

Would recommend people Subscribe to Matt Stoller Substance Big if there interested corporate consolidation & monopolies. It was one of the reasons I was against the acquisition.

If I remember correctly, he was on Waypoint podcast where he was constantly spouting wrong information and cherry-picking though. He seems like an activist, not an expert. Like he's against the right things but, he doesn't comprehend the actual state of the markets and the governance of them. His opinions aligned with Lina Khan's for the Microsoft ABK merger and as you can see, they failed spectacularly. This isn't really the result of a merger, but being a gigantic company and that would hardly change if they were two gigantic companies.

 

[Vena]

I wonder how many studios and companies in video games are gonna make it through 2024 without any restructuring and layoffs.

The only one I have any money on would be Nintendo at this point, feels like a dam is about to burst on this industry.

 

[Evilnemesis8]

I wonder how many studios and companies in video games are gonna make it through 2024 without any restructuring and layoffs.
The only one I have any money on would be Nintendo at this point, feels like a dam is about to burst on this industry.

With the amount of layoffs of veteran professionals I'm seeing on my X timeline, things are dire. With the sheer number of them being laid off, it's an inevitability that a lot of these workers are going to permanently exit the video game industry.
The brain drain is going to very real very quickly and this is going to take years for people newer to the industry to get the technical know how that is about to leave.

All of this because of some very short sighted decision making. Not all of them of course, but many.

Lastly, I think this is apt :

The main takeaway all these layoff statements seem to want the reader to walk away with is how painful it all is for management. Getting real old.

 

[GaiusBaltar25]

I know that every tech company is doing layoffs at the moment, but this is exactly why consolidation is largely a net negative. Many of these layoffs are likely the result of redundancies that wouldn't have occurred if ABK had remained independent. The idea of endless growth that so many corporations believed in at the height of COVID-19 has inevitably turned out to be nothing but a mirage. And what is their response? Mass firings of lower-level employees while the execs still rake in millions every year. The most ludicrous aspect of this is that the frequency of big acquisitions will likely increase once interest rates drop.

 

[master94ga]

Lastly, I think this is apt :

Bah, when you are a manager and your Boss ask to lay off your entire team surely is not a good day.

 

[Undead Warrior]

I wonder how many studios and companies in video games are gonna make it through 2024 without any restructuring and layoffs.

The only one I have any money on would be Nintendo at this point, feels like a dam is about to burst on this industry.

Easy, it's any company that didn't take on mounds of debt and expanded like crazy during 2020-2021. Most Japanese companies are safe I'd wager. Most US companies are fucked.

 

[Vena]

Easy, it's any company that didn't take on mounds of debt and expanded like crazy during 2020-2021. Most Japanese companies are safe I'd wager. Most US companies are fucked.

Actually, did we have any notable JP layoffs in 2023? I know SEGA Europe/NA had some turn-over but I don't recall any big news from Japan.

 

[Astrogamer]

I know that every tech company is doing layoffs at the moment, but this is exactly why consolidation is largely a net negative. Many of these layoffs are likely the result of redundancies that wouldn't have occurred if ABK had remained independent. The idea of endless growth that so many corporations believed in at the height of COVID-19 has inevitably turned out to be nothing but a mirage. And what is their response? Mass firings of lower-level employees while the execs still rake in millions every year. The most ludicrous aspect of this is that the frequency of big acquisitions will likely increase once interest rates drop.

Honestly, a lot of them would have. Prior to the acquisition, Activision was making moves to weaken the independence of Blizzard and that's where a lot of ABK's cuts came from in today's layoffs. I'm unsure if Activision would have let the survival game team continue this long if they still had not delivered something by this point (6 years in). Schreier is saying the game was still years out before they shuttered it today. Like possibly a still independent ABK could have not let go of 1000+ staff but, I would not bet on it.

I wonder how many studios and companies in video games are gonna make it through 2024 without any restructuring and layoffs.

The only one I have any money on would be Nintendo at this point, feels like a dam is about to burst on this industry.

Most Japanese companies should avoid layoffs as there seems to be Japanese laws that discourage mass layoffs. Most haven't except when the studio is completely closed. Their Western subsidiaries are not as lucky though.

 

[Vena]

Honestly, a lot of them would have. Prior to the acquisition, Activision was making moves to weaken the independence of Blizzard and that's where a lot of ABK's cuts came from in today's layoffs. I'm unsure if Activision would have let the survival game team continue this long if they still had not delivered something by this point (6 years in). Schreier is saying the game was still years out before they shuttered it today. Like possibly a still independent ABK could have not let go of 1000+ staff but, I would not bet on it.

Most Japanese companies should avoid layoffs as there seems to be Japanese laws that discourage mass layoffs. Most haven't except when the studio is completely closed. Their Western subsidiaries are not as lucky though.

So we should keep an eye out on Retro and such.