Microsoft is cutting off 1,900 people, or 8% of its gaming sector, as it consolidates its massive acquisition of “Call of Duty” developer Activision Blizzard.
In a note to staff carried by US publication The Verge on Thursday, Phil Spencer, the leader of Microsoft’s gaming group, stated that the cuts were made after the two companies discovered synergies.
Spencer informed staff that Microsoft and Activision were committed to creating a “sustainable cost structure” to expand the gaming company, which employs 22,000 people and includes the Xbox division.
“Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth,” he added.
Alongside the layoffs, Blizzard president Mike Ybarra said he was leaving the company.
“It’s an incredibly hard day and my energy and support will be focused on all those amazing individuals impacted,” Ybarra said on X, formerly Twitter.
Microsoft announced its blockbuster acquisition in January 2022, making it the world’s third-largest gaming company by revenue.
The buyout was closely scrutinized by regulators, particularly in the United States, but the transaction ultimately succeeded.
The transaction was first denied by Britain’s regulator due to concerns that it would harm competition in the rapidly growing cloud gaming sector, in which games are purchased electronically and gamers can use a range of devices other than consoles.
The layoffs occur amid an extraordinary wave of personnel reduction at Big Tech corporations that began in late 2022 and has continued until early 2024.