Microsoft Cuts Off 8% of Employees in Gaming Division

Microsoft Cuts Off 8% of Employees in Gaming Division

As the world awaits the resurfacing of the crypto bulls, the digital sector has witnessed significant layoffs, leading to the departure of core team players. The unexpected layoff in the crypto sector has primarily affected related industries in gaming and Web3.

In a recent report, the giant tech firm Microsoft joined slews of  companies planning to downsize to sustain growth.

Microsoft Lays Offs Staff

The Microsoft team regretted that the layoff would affect the employees working in its gaming division. The report indicated that the proposed layoffs would lead to the dismissal of 1,900 employees working on Activision Blizzard and Xbox projects.

The tech company anticipates that 8% of Microsoft’s gaming units will leave office in the coming days. The layoffs came days after the tech firm’s total valuation reached $3 trillion on January 24.

The exciting increase in Microsoft’s stock price was labelled a historic event after the market capitalization surpassed the $3 trillion mark. The integration of emerging technologies, such as artificial intelligence, in the tech industry has exposed Microsoft to fierce competition.

The increased competition in the tech industry has created job instability in the US. Besides the challenges in job retention, the unhealthy competition has forced Microsoft to delay launching some of its projects.

Impact of AI on Job Market

In an earlier post, the Microsoft team cancelled the launch of a new game on Blizzard. Shortly after Microsoft announced plans to abandon the Blizzard game, top-level executives, including Mike Ybarra and his colleague Allen Adham, stepped down from office.

The departure of the President of Blizzard and other executives sparked speculation among the game enthusiasts. On X, some game players demanded to know the fate of other Blizzard games under development.

Other X users led by the Communication Workers of America (CWA) lamented that the US lacked job stability. This implies that even if you work for a fast-paced company, your job retention is uncertain.

A CWA member noted that layoffs in the video game industry have been becoming a norm lately. He argued that despite the video game companies reaching the expected growth stage, more employees are leaving the gaming industry.

Responding to this, the tech company confirmed that the layoffs will have minimal impact on the games built on Blizzard. The Microsoft team confirmed that the remaining staff on Blizzard will be retained in other departments.

In a subsequent post, the head of Xbox, Phil Spencer, revealed that the tech company will offer the dismissed employees additional benefits according to the law. The executive regretted that Xbox team players will be leaving office.

However, Spencer explained that to attain the desired goals, Microsoft was required to seize viable opportunities that stimulate the growth of the business. The executive mentioned that Microsoft silently integrated artificial intelligence (AI) technologies into its gaming feature.

Layoffs in the Gaming Industry

Market speculators condemned Microsoft for launching AI-inspired games. In 2023, the Microsoft team launched an AI-fueled game development toolkit to offer the players an impressive experience.

The newly launched game development toolkit attracted tides of criticism over quality concerns. Others claimed that adopting AI in Microsoft’s initiative will lead to massive layoffs.

Upon contacting the tech company to inquire about further details on the layoffs, the Microsoft team did not comment. However, from last year, most tech firms demonstrated a growing interest in AI generative tools to increase efficiency and boost performance. The adoption of AI threatens the job market since industry leaders project AI-generative tools will gain dominance at the  workplace.

Microsoft’s recent layoffs mirror the dismissal of employees at prominent gaming companies. Early this year, Riot Games laid off 530 employees. Other gaming companies that engaged in headcount reduction this year included Twitch, Pixelberry Studios, Discord, and others. According to Kotaku’s recent study, around 6,000 employees were laid off in the gaming industry in 2024.

Editorial credit: DANIEL CONSTANTE /

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