Phil Spencer, CEO of Microsoft Gaming, speaks about the Activision layoffs and confirms that it was necessary for the company “because it’s a business that has to be profitable.”
Activision Was Already Planning the Layoffs
Microsoft ended the celebration over the closure of the Activision Blizzard King acquisition, as a cold shower, Microsoft and Xbox started 2024 by announcing massive layoffs in their recent acquisition, joining the wave of layoffs that unfortunately exists in the industry due to not meeting exaggerated expectations set in recent years. Phil Spencer, head of Microsoft Gaming, spoke about the issue and explained the reasons.
Phil Spencer stated that Activision was already planning the layoffs before it was acquired by Microsoft, even when it operated independently from the latter.
Certainly, some things were clarified, but now we have much more information. Therefore, the company assured that these massive layoffs are not ”completely” due to the absorption process.
“I Can’t Afford to Run a Business That’s Not Profitable”
During an interview, Phil Spencer was questioned about the current state of the industry and the reasons behind the layoffs at Activision Blizzard. In this regard, the executive pointed out the context that covers these decisions, specifically the changes in the industry regarding the increase in the cost of game development, as well as platform operation and what is happening in the console industry.
In that sense, the head of Microsoft Gaming recognized that the lack of growth in the industry in general and in the Xbox business in particular, especially in the console sector, were decisive factors for dismissing workers. He also pointed out the industry’s needs to meet investor expectations:
Phil Spencer. CEO Microsoft Gaming
“it’s a bit of both. But I’ll say that what concerns me most about the industry is the lack of growth. You have an industry projected to be smaller next year in terms of players and dollars. You also have many publicly traded companies in the industry that have to show growth to their investors because why would they own a piece of something that’s not going to grow?”.
Subsequently, Phil Spencer considered that the current moment is one of reflection when analyzing the human cost that the decisions of the video game industry have had: “we’re a business. I can’t afford to run a business that’s not profitable and growing within Microsoft. I reflect on friends of mine who have been displaced and lost their jobs, and I don’t want this industry to be a place where people can’t confidently build a career. So that’s why I keep looking back: How can this industry grow again? For us as Xbox or any of the teams out there, what we’re experiencing is really the result of an industry that isn’t growing, but can and will grow again. However, the implications have a human impact, and we should all reflect on that and think about it”.
In this way, Microsoft Gaming, together with its CEO, made it clear that this wave of layoffs is due to a restructuring of the gaming industry, which is going through one of its worst crises.
Stay tuned for this and other news like Sony Layoffs Affect 8% or About 900 Employees and EA Lays Off 5% of Its Workforce – 600+ People
