Microsoft Cuts 650 Jobs in Gaming Division

Microsoft has laid off around 650 employees from its gaming division, according to an internal memo shared online. This latest round of cuts comes eight months after the company laid off 1,900 in its gaming division, following its $68.7 billion acquisition of Activision Blizzard.

• The layoffs affect primarily corporate and supporting functions within the gaming division.
• Xbox chief Phil Spencer emphasized that no games, devices, or experiences are being canceled, and no studios are being closed.

Acquisition-Related Restructuring

Microsoft's recent layoffs are directly tied to the company's acquisition of Activision Blizzard. In his memo to staff, Phil Spencer explained that the cuts are a part of aligning the post-acquisition team structure and managing the business for long-term success.

• The acquisition, finalized in 2023, has created a large and complex gaming portfolio for Microsoft, requiring restructuring and streamlining.

Impact on Gaming Division

These layoffs are the second major round of cuts in Microsoft's gaming division within a year. The previous round, in January 2024, affected 1,900 employees in the Xbox and Activision Blizzard divisions.

• Following the previous layoffs, Microsoft closed several game studios, including Tango Gameworks and Arkane Austin.

Xbox Chief Phil Spencer's Statement

In his memo to staff, Phil Spencer addressed the layoffs and reassured employees that the cuts are not indicative of a shift in strategy or a decline in commitment to gaming.

• "We have made the decision to eliminate approximately 650 roles across Microsoft Gaming — mostly corporate and supporting functions — to organize our business for long-term success," the memo stated.

Microsoft's Gaming Ambitions

Despite the layoffs, Microsoft remains committed to its gaming ambitions. The company is actively investing in its Xbox platform, expanding its game studios, and developing new gaming technologies.

• The acquisition of Activision Blizzard signifies Microsoft's commitment to becoming a leading player in the gaming industry.

Tech Industry Layoffs

Microsoft's layoffs are part of a broader trend of layoffs in the tech industry. Companies across the sector are facing economic headwinds and adjusting their workforce to reflect changing market conditions.

• The gaming industry, like other tech sectors, has been impacted by economic uncertainty and shifts in consumer spending.