Santa Monica, California - Microsoft is laying off 1,900 people – as much as 8% of staff – from its gaming division, which includes Xbox and Activision Blizzard, just months after completing a blockbuster buyout of the Call of Duty maker.

In a memo to employees reported by The Verge on Thursday, Microsoft's head of gaming, Phil Spencer, said the cuts came after "areas of overlap" 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.

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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.

Microsoft launched its record-shattering takeover of Activision Blizzard 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 US, but the transaction was eventually waved through.

The UK'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.

This is just the latest wave of layoffs affecting Big Tech companies since late 2022.