Microsoft Joins the Growing Trend of Layoffs in the Video Game Industry
Despite the new year just beginning, the video game industry has already seen a wave of job cuts, and unfortunately, Microsoft is now adding to this trend. The tech giant announced plans to lay off 1,900 employees across Activision Blizzard and Xbox this week, despite recently reaching an impressive $3 trillion valuation.
Most of the layoffs will occur within Microsoft’s recently acquired Activision Blizzard division, accounting for about 8% of the gaming division’s total workforce. This acquisition, which took place just three months ago after a lengthy regulatory battle, has now resulted in significant job losses. Blizzard’s anticipated survival game has reportedly been canceled as a result, and high-level executives, including Blizzard President Mike Ybarra and Chief Design Officer Allen Adham, are leaving the company.
However, not all is lost for Blizzard employees affected by the canceled project. Those who were assigned to the now-defunct game will be reassigned to other departments within the company, as Blizzard still has other games in development.
In an internal memo, Xbox head Phil Spencer assured laid-off employees that Microsoft would provide severance and other benefits in accordance with local employment laws. While the company did not specify its future areas of focus, it’s worth mentioning that Xbox recently invested in an AI-powered game development toolkit. However, this move faced heavy criticism from industry talent, who feared that it would lead to further layoffs and lower-quality games. Microsoft’s AI gaming push has also faced backlash from gamers themselves.
The layoffs at Microsoft highlight the vulnerability of game industry workers, even at highly successful and profitable companies. The Communications Workers of America, a national union group representing game workers, emphasized that these job cuts serve as a clear indication that having a union voice in the workplace is crucial for protecting livelihoods. The group pledged ongoing support for workers at Microsoft and the wider video game industry who wish to unionize.
The rise of generative AI tools has been a cause for concern among industry workers, as it has been associated with increasing layoffs. While causation is difficult to prove, the correlation between AI adoption and job losses is alarming for many. It’s important for the industry to address these concerns and find ways to navigate the evolving landscape without compromising job security.
Unfortunately, Microsoft is not alone in its layoffs. Other major gaming studios, such as Riot Games, Twitch, Unity, Discord, and Nexon-owned Pixelberry Studios, have also made significant staff cuts this month. According to Kotaku, nearly 6,000 game industry workers have already lost their jobs in less than a month this year.
The gaming industry is experiencing a challenging period, and it’s essential for companies to consider the well-being and livelihoods of their employees while navigating these changes.
Analyst comment
Negative news: Microsoft Joins the Growing Trend of Layoffs in the Video Game Industry
As an analyst, the layoffs in the video game industry, including Microsoft’s recent announcement, reflect the vulnerability of game industry workers. The rise of generative AI tools and increasing layoffs are causing concerns. Companies need to prioritize their employees’ well-being and livelihoods during these changes to maintain job security and address industry concerns.
