Microsoft owns the Xbox games console, as well as a number of highly popular titles including Minecraft, Halo, and Age of Empires. Activision-Blizzard also owns a number of blockbuster titles, including the Call of Duty, Overwatch and Warcraft franchises. 

The merger cements Microsoft’s position as the second-largest video games company in the world, almost doubling its revenues in relation to Nintendo, and bringing it within striking distance of market leader Sony.

Microsoft swiftly closed the deal after receiving the nod of approval from the UK’s Competition and Markets Authority (CMA), the last major regulator that had been standing in the way of the acquisition.

Activision Blizzard call of duty display

According to the Verge, an internal memo lays out the reasoning for the layoffs:

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. Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth.

The fallout extends beyond the rank and file employees who have been let go by the software giant. Blizzard President Mike Ybarra has reportedly stepped down, as has Allen Adham, the studio’s chief design officer and a company co-founder. Additionally, Blizzard has canceled a survival game that has been announced but remained untitled.

Long-time Activision Blizzard fans have felt their games have fallen off in quality and innovation in the face of a relentless pursuit of profits, these layoffs are a sign that there is not much hope for a return to the company’s glory days as the company is subsumed into Microsoft’s byzantine corporate culture.