Microsoft is laying off 1,900 people, or eight percent of staff, from its gaming division as it consolidates the blockbuster buyout of "Call of Duty" maker Activision Blizzard.
In a memo to employees reported by US media The Verge on Thursday, the head of Microsoft's gaming division Phil Spencer said the cuts came after synergies were found between the two companies.
Spencer told employees that Microsoft and Activision were committed to finding a "sustainable cost structure" to grow the gaming business, which employs 22,000 people and includes the Xbox division.
"Together, we've set priorities, identified areas of overlap, and ensured that we're all aligned on the best opportunities for growth," he added.
Alongside the layoffs, Blizzard president Mike Ybarra said he was leaving the company.
"It's an incredibly hard day and my energy and support will be focused on all those amazing individuals impacted," Ybarra said on X, formerly Twitter.
Microsoft launched its blockbuster takeover in January 2022, an acquisition that made it the world's third-largest gaming company by revenue.
The buyout faced stiff scrutiny from regulators, including in the United States, but the transaction eventually prevailed.
Britain's regulator originally blocked the deal over fears it would damage competition in the fast-growing cloud gaming sector, where games are bought virtually and players can use a variety of devices rather than just consoles.
The layoffs come amidst an unprecedented wave of staff cuts at Big Tech companies that began in late 2022, but have rolled on through early 2024.