Following the completion of its acquisition of Activision Blizzard, Microsoft has laid off 1900 employees across its gaming division. This was mostly said to be a downsizing of duplicated positions following several acquisitions. However, one of the divisions that seems to have been completely wiped out is the former Activision Blizzard eSports team, which has caused various problems for the company's brands over the years.
Microsoft's overlap layoffs
The recent Microsoft gaming layoffs are part of a major restructuring of the company's gaming division, which includes Xbox, Zenimax Media, and the recently acquired Activision Blizzard. Microsoft acquired Activision Blizzard, the publisher of popular franchises such as Call of Duty, World of Warcraft, and Overwatch, for $69 billion in October 2023, making it the largest gaming deal in history. The layoffs, which affect about 1,900 employees or 9% of the gaming division, are intended to eliminate areas of overlap, align priorities, and create growth opportunities.
The Microsoft gaming layoffs have sparked a debate about the labor issues and challenges facing the gaming industry, which has seen a wave of job cuts across several companies in 2024. Some of the factors behind the layoffs include the impact of the COVID-19 pandemic, the shift to cloud gaming, the consolidation of the market, and the rising costs of game development. The layoffs have also raised questions about the future of Activision Blizzard, which has been embroiled in a legal scandal over allegations of sexual harassment, discrimination, and toxic work culture. Microsoft has pledged to improve the working conditions and culture at Activision Blizzard, as well as to support its creative vision and autonomy.
Clearing house at Activision Blizzard's eSports team
The impact of the Microsoft layoffs on the Activision Blizzard esports team is said to be devastating. Reports suggest that nearly the entire team has been let go, clearing house on the department. The team was responsible for organizing and producing some of the most popular and lucrative eSports leagues in the world, such as the Call of Duty League and the Overwatch League. The esports team was hit hard by the layoffs, as many of the staff members revealed on social media that they had been let go.
The layoffs have raised concerns about the future of Activision Blizzard's esports franchises, which have been struggling with declining viewership, revenue, and engagement in recent years. The layoffs could also affect the quality and frequency of the esports events, as well as the relationships with the teams, players, sponsors, and fans.
However, the Call of Duty League and the Overwatch League have been involved in their own struggles. In particular, the company's strong grip on the leagues has caused issues with growing them, both in terms of active teams and viewers. A focus not on the quality and dedication to the products but instead on the money being brought in has had a detrimental effect on not just the leagues they own, but also the industry as a whole.
Microsoft is said to still have plans for eSports within the Activision Blizzard brands but is pivoting the business model. Perhaps this push is what could end what is currently being called the "eSports Winter."