Microsoft's Major Gaming Shake-Up: 1,900 Layoffs and Leadership Changes in Post-Acquisition Strategy
Portfolio Pulse from Anusuya Lahiri
Microsoft Corp (NASDAQ:MSFT) is laying off 1,900 employees from its Gaming division, which includes Activision Blizzard and Xbox, as part of a post-acquisition strategy to align strategies and execution plans. The layoffs represent about 8% of the 22,000 employees in the division. Leadership changes include the departure of Blizzard president Mike Ybarra and chief design officer Allen Adham. A new president will be announced next week. A previously announced survival game by Blizzard is being canceled. These changes follow Microsoft's $68.7 billion acquisition of Activision Blizzard and come ahead of Microsoft's fiscal second quarter 2024 earnings report. Analysts expect strong performance from Microsoft, with Azure's AI workload growth expected to boost revenue.
January 25, 2024 | 3:41 pm
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NEUTRAL IMPACT
Microsoft is restructuring its Gaming division with layoffs and leadership changes, aiming for strategic alignment and cost sustainability. The market anticipates a strong performance in the upcoming earnings report, particularly from Azure's AI growth.
While layoffs and leadership changes can be perceived negatively due to potential disruptions, the market may view these steps as necessary for long-term strategic alignment and cost management. The anticipation of a strong earnings report, especially with Azure's AI growth, could offset concerns, leading to a neutral short-term impact on MSFT's stock price.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 100