Microsoft Layoff 83% of Activision Blizzard’s Esports Teams as Industry Struggles

In a massive restructuring move, Microsoft has laid off a significant portion of Activision Blizzard’s internal esports organization according to a new report.

This latest round of job cuts comes amid the larger elimination of 1,900 positions across Xbox, Bethesda and Activision announced last week.

What does the layoff of these esports operations signal about the challenges facing gaming’s competitive circuits?

Per sources, Activision Blizzard laid off a staggering 60 out of 72 employees (83%) from their internal esports division leaving just 12 staff members remaining.

This is a major blow to the publisher’s two existing esports leagues – Call of Duty League and Overwatch League.

And it came just after the Call of Duty League Major 1 tournament where Toronto Ultra triumphantly lifted the trophy.

Activision Blizzard declined to officially comment but shows commitment to esports and exploring “a model that more closely aligns with their game franchises.”

Additionally, they focus on adapting to a new business model to better serve the community.

This restructuring follows Activision Blizzard’s recent deal with ESL-FaceIt to take over the Overwatch League starting with Overwatch 2.

The publisher seems to be shifting to rely more on external esports firms to handle its competitive gaming initiatives.

The surprise move highlights ongoing struggles in the esports industry, where generating consistent revenue and turning a profit remain elusive goals despite massive engagement from both participants and spectators.

Call of Duty and Overwatch leagues have drawn huge audiences, but require massive investment that has failed to pay major dividends thus far.

So Blizzards looks like focusing on more of the core business and shifting its esports to a third-party organization.