Microsoft is laying off hundreds of workers across its gaming division in another major round of layoffs this year.
In an internal email shared with multiple publications like IGN and Game File Thursday morning, head of gaming Phil Spencer says the company will be laying off around 650 workers “as part of aligning our post-acquisition team structure and managing our business.”
“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,” Spencer wrote in the memo.
Spencer added that “no games, devices, or experiences” have been canceled because of the layoffs, and most of those affected were on corporate or support teams. As with other layoffs, the company will offer severance, health care, and outplacement services.
“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,” he continued.
Microsoft laid off 1,900 people across Xbox, ZeniMax Media, and Activision Blizzard in February — amounting to around 8% of its workforce. This also led to the cancellation of an unannounced survival game from Blizzard. Spencer also cited the Activision Blizzard acquisition as a key factor in the decision. “The leadership of Microsoft Gaming and Activision Blizzard is committed to aligning on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business. Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth,” Spencer wrote.
Microsoft completed its $69 billion acquisition of Activision Blizzard in October 2023, bringing many of those titles under the Xbox umbrella. Arguably its biggest post-acquisition addition was the Call of Duty franchise, including Black Ops 6 hitting Xbox Game Pass day one.
In May, Microsoft closed a number of its first-party studios: Tango Gameworks (Hi-Fi Rush), Arkane Austin (Redfall), Alpha Dog Studios (Mighty Doom), and support studio Roundhouse Games. Later, Microsoft partially reversed the decision and sold Tango and the Hi-Fi Rush IP to South Korean publisher Krafton, best known for PlayerUnknown’s Battlegrounds.
