Blizzard Largely Spared as Xbox Cuts Hit 1,600 Employees This Week

While thousands of Xbox employees are learning today whether they still have jobs, Blizzard staff got a different kind of message from the top. Blizzard Entertainment president Johanna Faries sent an internal email to employees acknowledging the weight of the day while signaling that the studio's own headcount has been hit far less severely than the rest of the Xbox organization.

The cuts across Xbox this week total approximately 1,600 positions, roughly halfway toward the 3,200 layoffs Xbox CEO Asha Sharma confirmed for the full fiscal year. Blizzard's exposure to that number, at least for now, is described as “comparatively minimal.”

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What Faries actually said to her team

The email, the contents of which have circulated publicly, reads in part: "While you can expect to hear more details regarding the day's events and what they mean for Blizzard in further communications, for now, I simply want to acknowledge that today is a difficult day that impacts many people in a range of ways."

Faries also thanked Blizzard staff for "moving with focus and creativity" and described the current period as "highly dynamic times," which is a measured way of saying the situation is still in motion. The message doesn't close the door on further changes for Blizzard; it just says more details are coming.

Here's the thing: that kind of careful, non-committal language from a studio president usually means the full picture hasn't been decided yet. Faries isn't saying Blizzard is untouchable. She's saying today wasn't the worst of it for her team.

Why Blizzard appears to be shielded, for now

The logic behind Blizzard's relative safety connects directly to why Xbox is restructuring in the first place. Sharma has been explicit that the company spread itself too thin by placing bets on projects that didn't pay off, while the core businesses didn't get the attention they needed. Her words: "The number one measure of your strategy is what you put your resources behind, and we simply spread ourselves too thin."

Blizzard's portfolio, Diablo, StarCraft, Warcraft, and the live-service behemoth that is World of Warcraft, represents exactly the kind of established, high-revenue IP that Xbox wants to protect and build around. These aren't experimental bets. They're franchises with decades of audience loyalty and consistent revenue.

There are also reported plans for cross-media adaptations of Blizzard IP, meaning TV and film projects that could extend these franchises beyond gaming. That kind of expansion doesn't happen if you're gutting the studio responsible for the source material.

The studios that weren't so lucky

The contrast with other Xbox-owned studios is stark. Four studios are being released entirely: Undead Labs, Compulsion Games, Ninja Theory, and Double Fine Productions. Undead Labs and Ninja Theory are being sold to outside buyers, while Compulsion Games and Double Fine will be spun off as independent studios.

Arkane Studios is in a murkier position. Xbox is currently reviewing "potential strategic options" for the studio, which is the kind of phrase that rarely ends with good news. Arkane's original founder, Raphael Colantonio, responded to Sharma's announcement with a pointed joke on social media, asking how much the studio would cost to acquire. "I'm asking for a friend," he wrote.

For players invested in Arkane's work, that situation is worth watching closely. The studio behind Dishonored and Prey being put up for review is a significant development, regardless of how it resolves.

What this means for Warcraft, Diablo, and BlizzCon

For players actively engaged with Blizzard's games, the short-term picture looks stable. The studio isn't being disbanded, sold, or restructured out of existence. BlizzCon is happening. Cross-media projects are reportedly in the pipeline. The key here is that Blizzard's franchises are the type of IP that Microsoft wants to monetize more aggressively, not less.

That said, Sharma confirmed the full 3,200 cuts haven't landed yet. With around 1,600 positions eliminated this week, the second wave is still ahead. Whether Blizzard remains "comparatively minimal" in impact through that next round is the real question.

If you're keeping tabs on the broader Xbox situation while staying on top of your gaming, our Marvel Rivals Season 7 patch notes break down every change worth knowing this season. For everything else across gaming right now, the full gaming guides hub has you covered.