Microsoft will lay off 8% of the workers at its gaming unit

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Microsoft is cutting around 1,900 employees in its gaming unit Activision Blizzard and Xbox this week, CNBC reported on Thursday, citing an internal memo from Microsoft Gaming CEO Phil Spencer.

The layoffs, which will eliminate around 8% of Microsoft Gaming’s 22,000 staff, are part of a larger “execution plan” that will reduce “areas of overlap,” shortly after the US software giant closed on its $69 billion purchase of Activision Blizzard, its largest ever acquisition, the head of the company’s gaming division said.

“It’s been a little over three months since the Activision, Blizzard, and King teams joined Microsoft. As we move forward in 2024, the leadership of Microsoft Gaming and Activision Blizzard is committed to aligning on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business,” Spencer wrote in a note.

Microsoft closed its deal for Activision Blizzard, the publisher and developer of several best-selling gaming franchises, in October 2023. The deal boosted the company’s weight in the video-gaming market with popular titles including Call of Duty and Diablo. Experts say the acquisition will help Microsoft compete with industry leader Sony.

Microsoft has recently overtaken Apple as the world’s most valuable company with its market cap surpassing $3 trillion on Thursday.