Microsoft slashes 650 more jobs in gaming after recent layoffs

Microsoft is laying off around 650 employees in its gaming division today, marking another wave of cuts in the wake of its $68.7 billion acquisition of Activision Blizzard.

This comes months after Microsoft laid off 1,900 employees from Activision Blizzard and Xbox, a move that included the closure of several game studios, including Redfall developer Arkane Austin.

Xbox chief Phil Spencer communicated the latest layoffs to employees in an internal memo this morning. The cuts, which primarily affect corporate and support functions, are part of Microsoft’s efforts to align its post-acquisition team structure and organize the business for long-term success.

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Spencer emphasized that “no games, devices, or experiences are being cancelled” and that no studios are being closed as part of these layoffs.

The gaming community has been on edge since the initial layoffs in May, which sparked public criticism from Dinga Bakaba, head of Microsoft-owned Arkane Lyon.

Bakaba voiced concerns about Microsoft’s strategy, especially regarding the closure of several game studios, which shocked both employees and fans.

The shutdown of Tango Gameworks, the studio behind the successful game Hi-Fi Rush, was particularly unexpected and raised questions about the company’s direction.

In his memo, Spencer acknowledged the difficulty of these decisions and expressed gratitude for the contributions of the impacted employees. He assured that Microsoft is providing exit packages with severance, extended healthcare, and outplacement services to support those affected by the layoffs in the US. Packages outside the US will differ based on location.

With these changes, Microsoft aims to better support its studio teams and business units with scalable programs and resources, positioning the company for sustainable future growth. Despite the challenges, Spencer remains optimistic about the future, emphasizing the team’s resilience in delivering for players even in trying times.

Here’s Phil Spencer’s memo in full:

For the past year, our goal has been to minimize disruption while welcoming new teams and enabling them to do their best work. As part of aligning our post-acquisition team structure and managing our business, 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.

I know that this is difficult news to hear. We are deeply grateful for the contributions of our colleagues who are learning they are impacted. In the US, we’re supporting them with exit packages that include severance, extended healthcare, and outplacement services to help with their transition; outside the US packages will differ according to location.

With these changes, our corporate and supporting teams and resources are aligned for sustainable future growth, and can better support our studio teams and business units with programs and resources that can scale to meet their needs. Separately, as part of running the business, there are some impacts to other teams as they adapt to shifting priorities and manage the lifecycle and performance of games. No games, devices or experiences are being cancelled and no studios are being closed as part of these adjustments today.

Throughout our team’s history, we have had great moments, and we have had challenging ones. Today is one of the challenging days. I know that going through more changes like this is hard, but even in the most trying times, this team has been able to come together and show one another care and kindness as we work to continue delivering for our players. We appreciate your support as we navigate these changes and we thank you for your compassion and respect for each other.

Phil