For a long time, Microsoft was in a rapid growth phase, which was characterized by rapid hiring and quick expansions across the globe. But now, like many other big tech firms, Microsoft has been restructuring its operations in light of the expected economic slowdowns in the coming years. First, it has invested heavily in artificial intelligence (AI) to pave the way for automating repetitive tasks and operations across its departments. At the same time, it has realigned its workforce so as to focus on the areas with the most promise, such as cloud services and AI, while pulling back from areas that are likely to suffer the most in the impending economic downturn. And most significantly, it has cut back on its spending across most departments. With these strategies in place, it comes as no surprise that many employees at Microsoft have found themselves labelled redundant or no longer essential, thus resulting in job losses across the board. Ireland is no exception.

Why Did People Lose Jobs at Activision Blizzard?

Job Loss

During Microsoft’s expansion, it acquired Activision Blizzard, a gaming company, in late 2023 for a reported $68.7 billion. This subsidiary became part of the organization’s gaming division and was coupled with Xbox and ZeniMax, thus contributing to the organization’s profits. All was good until Microsoft announced that it would be embarking on global layoffs across its gaming division, 128 of which would affect the people working at Activision Blizzard’s support center in Cork, Ireland. So, why would the organization make this move?

  • Overlap in support functions. When Activision Blizzard and Microsoft merged their operations, there was overlap between the support functions, such as finance and customer service. With Microsoft leaning towards a leaner organization for efficiency and cost reductions, there was a need to consolidate these overlapping roles, thus rendering some positions redundant.
  • Need for market competitiveness. The more that organizations spend on operations, the more they have to charge for their products and services. And with Microsoft facing stiff competition from other organizations, its top leaders, including its gaming CEO Phil Spencer, saw it fit to cut back on operational costs so they could offer more competitive market rates. And this translated into fewer labor costs.

Additionally, Microsoft has been redirecting its key resources to the departments with the most growth potential. As such, by cutting back on labor and other operational costs in underperforming or cancelled projects, it was able to invest more in the projects with the highest prospects, such as its Game Pass.

Effects on the Irish Gaming Industry.

Effects

Microsoft’s decision was not targeted at the support center in Cork. Instead, it embarked on global layoffs, which resulted in about 1,900 job losses in its gaming division. That’s a loss of about 8% of its total gaming workforce. The effect was so profound that many studios faced financial issues, resulting in the cancellation of several games following the announcement. In Ireland, 128 job losses in the Cork office may have represented a loss in support staff, but the impact on the gaming industry was quite high.

How so?

  • The loss of a major employer. The gaming industry relies on more than game developers and designers. In fact, it is an ecosystem made up of players, game designers and developers, game marketers, and most importantly, specialized support and administrative roles. As such, with the reduction of the support workforce, the gaming industry lost a key part of its operational efficiency.
  • The concern over instability. For many years, the Irish tech sector has been the European base for many multinationals. Microsoft’s move to cut 128 jobs in its Activision Blizzard did not go unnoticed, especially since other tech companies had already had similar layoffs. After all, investors always want to direct their resources to stable and expanding markets, and such layoffs can reduce their investment confidence in a market.

However, not all the effects were on the negative side. With people losing jobs in an AI-driven world, many people realized that they had to reskill and upskill in emerging technologies so as to remain competitive. People in the gaming industry who have taken advantage of this gap have been able to stay relevant. Furthermore, the Irish Parliament took note of the lack of adequate employee representation during layoffs by multinational corporations, given how Activision Blizzard employees were unable to actively engage with the organization at the time of the layoff announcements. Employees are hopeful that this will inform better labor policies in the region.