If only they knew what was coming (Picture: ResetEra)
The loss of nearly 2,000 jobs has been great for Microsoft’s share price, as details begin to come through about which teams are affected.
The first thing most people will have said when hearing that Microsoft has just laid off 1,900 people from across Xbox Gaming, Bethesda, and Activision Blizzard is: ‘Why?’
The answer to that is depressingly simple: because it’s what investors like to see when a company is doing poorly or isn’t demonstrating enough growth – the latter of which is a problem for Xbox.
The layoffs were intended as a solution to this issue and already they’ve had the desired effect, with Microsoft’s market capitalisation – the amount of money they’re valued at as a company – passing the $3 trillion mark.
Microsoft recently became the most valuable company in the world, with a market cap of $2.89 trillion but the layoffs have increased that to $3.01 trillion, which will placate shareholders and investors worrying about the $69 billion they spent on Activision Blizzard.
It’s the same story whenever there’s an acquisition but because Microsoft’s purchase was especially large, the consequences for ordinary workers has been equally extreme.
Exactly what studios and teams have been affected will become more apparent over the coming days but judging by the comments from ex-staff on Twitter all Call Of Duty developers have been affected, including Infinity Ward, Treyarch, Sledgehammer Games, High Moon Studios, and Solid State Studios.
Quality assurance (QA) staff have been key targets, but Windows Central’s Jez Corden also reports that entire departments designed to support physical retail have been shut down, along with almost all internal customer support teams for Activision Blizzard.
Those duties will now be outsourced to other, external companies, with community management suffering in a similar manner. More than one in three employees at Activision Blizzard’s offices in Ireland, which employs over 400 people, are said to be losing their job.
Many developer teams have seen major cuts too, with some losing 10% of staff or more. However, Blizzard seems to have been the worst hit of any of Microsoft’s first party developers, with major cuts at Overwatch and survival game Odyssey being cancelled completely.
The photo at the top of the page was taken during a recent visit by Xbox boss Phil Spencer to Blizzard, where the majority of staff welcomed the acquisition, hoping for higher wages and better working conditions.
A large percentage of the crowd behind him have now been made redundant, while Blizzard president Mike Ybarra, standing next to him, has also left the company today.
To those affected the layoffs are a nightmare situation, and to ordinary gamers looking in it seems apocalyptic, but for Microsoft this is all according to plan, as the increase in company value shows.