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The Damage

Mass layoffs at Microsoft mean workers have to pick up the pieces

8:16 PM EST on January 26, 2024

Sergei Elagin / Shutterstock

Yesterday, Microsoft laid off nearly 2,000 people in its gaming division, or about eight percent of the division in total. Initially, this was followed by confusion from workers: Where would the axe fall? Who would be severed from their livelihoods? But now the dust is settling atop the wreckage, and workers at Activision Blizzard and other Microsoft subsidiaries are wondering how they’ll even begin to pick up the pieces.

As of now, news reports and comments from laid-off employees suggest that many parts of the company were hard hit: Activision Blizzard’s six-years-in-the-making survival game was canceled, and much of its team, including its director, was laid off. The Overwatch 2 team lost dozens of employees, including its lead narrative designer, in a round of cuts that did not seem to factor in seniority or talent. Activision subsidiaries like Sledgehammer, High Moon, and Toys for Bob – which have all contributed to Call of Duty in recent years – reportedly lost significant percentages of their workforces. Current and former Activision Blizzard employees tell Aftermath that community and customer service departments across the company wound up in especially bad shape, with “almost all” Game Masters – employees who oversee and moderate World of Warcraft servers – being let go.

Last year, Activision Blizzard implemented an extremely strict return-to-office mandate at a handful of largely QA-focused locations, which some employees viewed as a form of “soft layoffs” meant to force out remote and hybrid workers sans the funereal pageantry of a typical layoff. But while many departed as a result of this – leaving some teams severely understaffed – other employees stayed with plans to move or begin commuting in advance of the mandate going into full effect next week. Current employees tell Aftermath that the QA workers subject to the mandate – those at offices in Minneapolis, Austin, and El Segundo – were not impacted by the layoffs, so there were no nightmare scenarios where somebody moved and then immediately lost their job.

"None of the employees affected by RTO are impacted by the layoffs,” a current Activision Blizzard employee told Aftermath. “The three Activision QA locations had a meeting confirming this."

Other studio QA teams were impacted, as were those like one responsible for editorial and content programming on Blizzard’s service. Some of these employees did lose jobs shortly after moving.

“Unfortunately a third of my team was let go today, including myself,” wrote the editorial team’s director, Dan Hsu. “I feel absolutely terrible for the others. One just signed a lease, another just got married, another just moved here for the job and was here barely a month, and so on. I wish I could fix this for them.”

“While no one affected by the RTO mandate moved only to lose their job today,” a current Activision Blizzard employee told Aftermath, “there are people in other departments that were forced to move when the hybrid schedule went into effect April of last year – for Activision; I believe Blizzard's went into effect in September – that may have lost their job today.” 

Organized workers across Microsoft fared better than most. Union members at Zenimax, Blizzard Albany, and Raven Software – most of whom work in QA, all of whom organized under the Communications Workers of America (CWA) – were entirely unaffected by the layoffs. As part of negotiations, CWA and Zenimax workers secured legally binding terms stating that Microsoft must inform them in advance if their 376-member unit is going to suffer any sort of reduction in force. Because that did not happen ahead of this week’s layoffs, Zenimax workers immediately knew they were safe. 

"I'm relieved that our folks weren't touched,” Autumn Mitchell, a tester and union member at Zenimax, told Aftermath. “I woke up to my phone just buzzing because people were terrified. We got this news that we were good, and they were like, 'Oh, OK.' But I'm also getting buzzes from developers and producers and people who aren't in our unit, and they're telling me that they're crying in their cars. It's painful. It's really, really painful."

“Super small consolation, since it could have affected colleagues I work with every day. And still that's not much, since it shouldn't happen to anyone,” Conor O’Donnell, a tester and union member at Zenimax, told Aftermath. “What can unions do? We can negotiate over what [reductions in force] look like, which is certainly not something anyone can do without a union. Some things that other unions have gotten are things like negotiating over how much notice you need, how much severance pay, or alternatives to straight up firing people."

Mitchell is not certain exactly if or how CWA shielded union members from layoffs. She said CWA is in “pretty regular communications” with Microsoft and that “there's a really good chance that there was an ongoing conversation happening” that kept workers safe. CWA did not reply to Aftermath’s request for more details in time for publication.

CWA made a point of pushing hard for the Microsoft-Activision Blizzard deal’s completion back when it was facing regulatory scrutiny in the US and UK. CWA president Claude Cummings Jr. published a piece on TechCrunch titled “A merger that’s good for workers and consumers” in August of last year. His argument centered around a legally enforceable labor neutrality agreement that CWA struck with Microsoft, which states, effectively, that Microsoft won’t union bust as a growing number of employees within the company organize. This stood to benefit employees at Activision Blizzard, who’d suffered through no small number of union busting attempts under former CEO Bobby Kotick’s watch. Cummings Jr. and some unionized workers felt like the upsides of the neutrality agreement outweighed the risks posed by large-scale industry consolidation, or that Trojan-Horsing in union protection could serve as a bulwark against the ravages of consolidation that would likely happen regardless. 

This is not to say that Microsoft is playing entirely nice with organized workers. The ABK Workers Alliance, a group of organized workers at Activision Blizzard that formed in the wake of workplace misconduct allegations in 2021 – not all of whom are union members – said that the layoffs took their organization by surprise and affected some of its members. 

“We are very surprised to hear about these layoffs across Xbox and ABK, and have seen some of our very active members affected by it,” an ABK Workers Alliance spokesperson said to Aftermath in a statement.

Some employees are now concerned that CWA made the wrong call – that it led workers into the jaws of a lion to which it might have cozied up a bit too much. But unionized workers believe that any labor organization in a case like this – a round of layoffs that could well have happened even without Microsoft in the picture, given the way other video game companies are behaving right now – is better than none, and that the only way forward is to keep organizing. 

"I mean, it's the standard right now for this industry: One company lays off a bunch of people, and then every single one after that seems to follow,” said Mitchell. “I think the only way that workers can fight back is by getting their labor organized and by forming a union so that they can at least have some input on how it goes down when it happens to them."

Unionized workers remain hopeful that they can maintain a conversation, as opposed to a more combative dynamic, with Microsoft and build something sustainable. But for many workers – some of whom were optimistic upon hearing what proved to be empty words from Phil Spencer that Microsoft would “nurture what has made Blizzard unique” – trust has been broken. And that will take time to rebuild. 

"Anytime layoffs are announced, it hurts,” said Mitchell. “Trust is a funny thing. It can be broken, and it can be rebuilt. I trust my coworkers quite a bit, and no matter what kind of shaky relationship is happening between us and the company, the trust we have in each other will be enough for us to continue to meet and come in good faith and try to make where we work better."

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