Staff Reports
Microsoft recently made a major acquisition, spending a whopping $69 billion on Activision Blizzard. However, it seems that this big purchase has had some negative consequences for the company’s bottom line. To mitigate the financial impact, Microsoft has decided to reduce its workforce, resulting in 1,900 job cuts.
In a memo obtained by The Verge, Microsoft’s head honcho, Phil Spencer, broke the news to his employees. He expressed regret about the reduction in gaming workforce but assured that they would navigate this process thoughtfully. Spencer also recognized the contributions of those affected by the layoffs, stating that they should be proud of what they have accomplished at Activision Blizzard, ZeniMax, and the Xbox teams.
Video Game Industry Woes: Microsoft Axes Nearly 2,000 Jobs After $69 Billion Deal https://t.co/qPu8IE5Vlu #BreakingNews #Breaking #News pic.twitter.com/TqC8rIubQp
— ? Pointman Alerts (@PointmanAlerts) January 26, 2024
The timing of these job cuts is interesting, as they come just months after the completion of the Activision Blizzard acquisition. The deal faced significant legal challenges due to concerns about potential monopolistic effects. However, these concerns were eventually addressed, and the acquisition was finalized in October. Despite this, the repercussions are still being felt.
Apart from the layoffs, Microsoft is also losing key personnel. Blizzard president Mike Ybarra will be leaving the company, adding to the upheaval caused by the layoffs. Ybarra expressed gratitude to those impacted by the cuts and assured them that this was not a reflection of their work.
While these layoffs primarily impact the video game sector of Microsoft, the company has been cutting jobs for over a year now. In January 2023, Microsoft laid off 10,000 employees as part of its streamlining efforts. Despite these layoffs, the tech giant achieved a milestone on Wednesday by becoming the second company ever to reach a $3 trillion valuation, following in the footsteps of Apple.
All in all, while Microsoft’s massive acquisition may have led to some short-term pain, the company remains strong and continues to make waves in the tech industry. It will be interesting to see how these changes impact the future of the video game industry and Microsoft’s position within it.
