Microsoft Announces Additional Job Cuts in its Gaming Division.
Microsoft, the owner of Xbox, is set to reduce its gaming division workforce by approximately 650 employees in a new wave of layoffs following its $69 billion merger deal. The company indicated that the cuts will primarily impact staff in “mostly corporate and supporting functions” around the world.
This decision follows earlier layoffs, including the termination of 1,900 employees in January and the closure of four studios that were acquired before Microsoft’s purchase of Activision-Blizzard in May. The recent job losses have raised concerns within the industry about the stability of the gaming sector.
In a memo shared online and verified by the BBC, Xbox head Phil Spencer reassured employees that no games, devices, or experiences would be cancelled, and no studios would be closed as a result of the latest layoffs. This statement aims to alleviate fears among the gaming community and industry stakeholders.
Microsoft’s acquisition of Activision-Blizzard last October also included the purchase of King, the maker of Candy Crush, and came on the heels of its buyout of Zenimax, which owns Bethesda, the developer behind the Fallout series. This series of acquisitions reflects Microsoft’s aggressive strategy to expand its gaming portfolio.
Spencer explained that the decision to cut jobs—amounting to about 3% of the gaming staff—was made to align the company’s structure post-acquisition and to organize the business for long-term success. This restructuring is seen as a necessary step to adapt to the evolving gaming landscape.
While Spencer confirmed that games and studios would remain unaffected, he acknowledged that there would be “some impacts to other teams” as they adjust to changing priorities and manage the lifecycle and performance of their games. This adjustment process is crucial for maintaining the quality and competitiveness of Microsoft’s gaming offerings.
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The gaming industry has faced significant layoffs over the past two years, a trend that has followed a surge in investments and acquisitions during the record profits and player engagement seen during the Covid-19 pandemic. Major companies like Sony, Riot Games, and Epic Games have also laid off hundreds of employees amid these changes.
Spencer expressed empathy for the affected workers, recognizing that the news would be “difficult” for them. He took the opportunity to thank those impacted for their contributions to Microsoft, emphasizing the company’s commitment to supporting its remaining employees as it navigates this challenging transition.
