Less than four months after completing the acquisition of Activision Blizzard, Microsoft announced that it would lay off 1900 employees, mainly Activision Blizzard employees.
On January 25th local time, it was reported that Microsoft will lay off 1900 employees from its existing team of 22000, with a layoff rate of 8% of the total number of employees in Microsoft's gaming department. The employees involved in this layoff are mainly from Activision Blizzard, ZeniMax, and Xbox teams.
Microsoft referred to the layoffs as a "painful decision". Regarding the specific reasons for the layoffs, Microsoft mentioned that as we enter 2024, the leadership of Microsoft Games and Activision Blizzard are committed to aligning their strategies and execution plans with sustainable cost structures. Both sides jointly established priorities and identified overlapping areas.
Another news disclosed alongside the layoffs is that Activision Blizzard President Mike YBarra and Chief Design Officer Allen Adham will leave the company, and a survival game previously announced by Activision Blizzard has also been cancelled.
The above news does not seem to have affected Microsoft. On January 25th, Microsoft's US stock closed at $404.87 per share, up 0.57%, with a market value of $3 trillion. This is the first time that Microsoft's market value has reached $3 trillion, and Microsoft is also the second company in history to reach a market value of $3 trillion after Apple.
In October 2023, Microsoft completed its acquisition of gaming company Activision Blizzard, which owns numerous globally renowned IPs such as World of Warcraft, Call of Duty, StarCraft, and Diablo. This acquisition, which lasted for 22 months and was worth $69 billion, is the largest transaction in Microsoft's history and also one of the largest 30 acquisitions in history.
Microsoft announced in early 2023 that it would lay off 10000 employees worldwide, accounting for approximately 5% of the total number of employees at that time. For the new round of layoffs, the Communication Workers Association (CWA) in the United States has evaluated that this clearly indicates that even in highly profitable industries and working in a successful company, without a voice in the job, livelihoods cannot be guaranteed.
Several technology giants, including Google's parent company Alphabet and Amazon, have recently announced layoff plans. According to layoff statistics website Layoffs. fyi, in January, 76 technology companies had laid off over 21000 employees. According to a report released earlier this month by Challenger, Grey, and Christmas, the technology industry laid off 168000 jobs in 2023, making it the industry with the highest number of layoffs, including 10000 from Microsoft.
Microsoft is expected to release its second quarter financial report for the 2024 fiscal year next week, which will introduce for the first time the impact of the acquisition of Activision Blizzard on the company.