Microsoft’s gaming division announced they were laying off 1900 Activision Blizzard and Xbox workers today as part of a cost cutting move (effectively a reduction in force move of duplicative roles which is usually most always the case in these sorts of mergers and acquisitions). This comes right on the heels of the company’s acquisition of Activision Blizzard which was finalized back in October. The majority of the cuts seem to be those who were part of Activision Blizzard as per the article. I did say before that the rank and file tend to be the main collateral damage while executives have their golden parachutes. It sucks because the ones losing their jobs aren’t getting paid the big bucks.
The actual group that seems to be targeted is most of Blizzard’s customer service team (arguably one of the best parts of the company). The article notes that Microsoft plans to outsource this to third parties (oh great) and that this currently has most all of Activision Blizzard (and possibly King) live service games, without any current moderation, in-game game masters, or customer service representatives available (talk about a shitshow in the making). As speculated, I also believe this will eventually ripple through to community management roles (remember, Microsoft is fully behind AI and will use that to replace a lot of human roles).
Community management has long become an oxymoron because that role has been made to have to wear many different hats where they can barely engage with the community. I can see Microsoft Gaming moving to AI to parse and collate feedback from the community while utilizing AI to do all the social media posting. As I noted recently in my thoughts about Palworld, my feelings regarding AI is that it needs to be utilized in moderation; that the human aspect cannot be eliminated completely. While AI can be a useful tool in this area, I still believe such feedback needs to be reviewed by an actual human because people can relate to the issues that are being conveyed. An algorithm doesn’t care by comparison and has no concept of priorities except what it is programmed to parse. I guess we will see. Anyone advocating for fully adapting to and embracing AI (without considering the ramifications), needs to look in the mirror though because it could be their own personal livelihood and well being that is at play in the future.
Did this occur faster than I expected? Oh yes. Normally the corporate inertia is so massive, that it takes a while for leadership to determine what and where they want to reduce. Reduction in force (RIF) is pretty much a given in these larger M&A’s and is more of a matter of when, not if. 1900 rank and file employees being sacrificial lambs however is a troll though considering Microsoft as a whole (I know that Microsoft Gaming is a division of Microsoft that is expected to operate independently, but it still factors in to the overall balance sheets regardless). Why? Their market capitalization as of this writing is THREE TRILLION USD. That is 3,000,000 million. Even if you take all of those salaries/wages/benefits packages for every one of those 1900, it would be a rounding error in the greater scheme of things. How about providing alternative opportunities within the company where their experience and knowledge can be re-utilized?
Again, corporate bean counting executives care only one iota about saving every penny no matter how huge their revenue intake is and how profitable they are. As a shareholder myself in many companies (including MSFT which I am now looking to divest myself of sooner rather than later), I’ve advocated for a more socially responsible shareholder approach that is not solely about shareholder value at all costs; corporations need to also take care of their rank-and-file employees along with the communities they operate in. This job slashing by such a well-off company, illustrates again how your livelihood doesn’t matter to the executive “leadership”.
Activision Blizzard executives (well off people who have long been the source the issues and the ones who I believe should be canned first) themselves have been reporting to Matt Booty (who was promoted to president of Game Content and Studio back in October 2023 as part of a reorganization move during the acquisition). In simple english, Booty oversees all of the different studios (Activision, Blizzard Entertainment, Bethesda, ZeniMax, King, etc). As it relates to Blizzard Entertainment, this pretty much spells the end of their independent structure (though that significantly eroded anyway once Mike Morhaime stepped down as CEO back in 2018). While the Irvine campus and associated Blizzard Entertainment brand name will continue to exist, most of the executive roles that were part of it will end up being depreciated. Whether or not Activision Blizzard itself retains its existing organization structure remains to be seen (I highly doubt it will since there are going to be redundancies there as well).
Blizzard Entertainment’s last remaining co-founder Allen Adham has also decided to depart (which signals the above loss of Blizzard long being largely independent through all of its prior acquisitions; this was something Morhaime negotiated in prior M&A’s). Additionally, Blizzard Entertainment president Mike Ybarra, is also departing (at least this part, I see as good riddance). While the brief PR seems to be making it sound like this was a voluntarily move, it contradicts Ybarra’s own words back at BlizzCon where he told people that he (paraphrasing) “wanted to stay at Blizzard for the long haul… that someone would have to drag him out of Blizzard.”
Considering Ybarra’s roots as a Microsoft alumnus (who also worked closely with current Microsoft Gaming head Phil Spencer), there must have been more than enough red flags/feedback regarding his leadership style while Blizzard president for him to get the boot. I did also state before that the entirety of Blizzard Entertainment’s leadership needed to be overhauled. Well, I believe that is going to happen and I expect there to be fallout lower in the existing org chart as time goes on. I do believe the company needs new blood at the designer level after all of the internal scandals/drama. It’s not like that didn’t have an impact on their franchises though (Diablo IV’s messed up development is a small symbol of that dysfunction).
Another casualty is the survival game (Project Odyssey) that was in development by Blizzard which according to the article (and a later Bloomberg report), was largely in part due to technical issues with the in-house engine (Synapse) they were planning to use. All of this should serve as warning to anyone considering a career in the gaming industry. It’s probably one of the least desirable given how the industry is run (along with the unrealistic expectations of the customer base), how it is far more unstable in an already unstable environment of corporate executives expecting more with less. I don’t expect this to get any better with generative AI (all I see is more rank and file bloodletting as executives look to eek out every penny from every possible avenue).
