Phil Spencer announces Microsoft is laying off nearly 2,000 people from its gaming division

Microsoft has announced that it will be laying off 1,900 members of its 22,000-person gaming division.

In a memo seen by IGN, Xbox chief Phil Spencer announces that "we have made the painful decision to reduce the size of our gaming workforce by approximately 1,900 roles." Spencer's reasoning stems from a desire for Microsoft and Activision Blizzard to create a business plan with a "sustainable cost structure."

These layoffs, which will affect Activision Blizzard, Zenimax, and Xbox, are the latest in a huge wave of cuts that have affected the games industry since last year. Earlier this week, 530 people were laid off from League of Legends developer Riot Games, amid thousands of similar redundancies across the sector.

It's not uncommon for major company mergers - like that of Xbox and Activision Blizzard last year – to result in substantial restructuring. Nevertheless, this remains one of the largest layoffs we've seen in the last 12 months and is likely to be strongly felt across the industry.

Additionally, The Verge reports that Blizzard president Mike Ybarra and co-founder Allen Adham, the company's current chief design officer, are leaving the company. As "part of these changes," The Verge reports, Blizzard's previously announced survival game, which would've established a "whole new universe," has been canceled. Microsoft Studios president Matt Booty apparently sent a memo of his own addressing this, confirming that Microsoft will be "shifting some of the people working on it to one of several promising new projects Blizzard has in the early stages of development."

Ybarra, at least, has confirmed his departure – effective today, it seems – in a tweet, and hinted at the broader layoffs as well. "I want to thank everyone who is impacted today for their meaningful contributions to their teams, to Blizzard, and to players' lives," the departing president writes.

After these Microsoft cuts, the next-largest games layoff wave of 2024 would be Unity, which shed 1,800 employees – a staggering 25% of its staff – a week into the new year. "We are … reducing the number of things we are doing in order to focus on our core business and drive our long-term success and profitability," CEO Jim Whitehurst said in an increasingly familiar memo.

Discord and Twitch have also seen substantial layoffs as the games industry and orbiting platforms and technologies continue to bleed talent.