Microsoft has announced the elimination of 650 positions within its Xbox division. This is the third round of layoffs this year as the company aims to reduce expenses and integrate its $69 billion acquisition of Activision Blizzard.
According to a memo from Xbox chief Phil Spencer, the job cuts will primarily affect corporate and supporting roles. He assured that no games, devices, or experiences are being canceled, and no studios are being closed as part of these adjustments.
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Microsoft cut 1,900 jobs in January, many of which were from Activision units and studios. In May, the company announced it was closing a number of gaming studios, including Arkane Austin, Tango Gameworks and Alpha Dog. CNBC reported several employees were also laid off as part of the shutdowns, although Microsoft has not disclosed how many jobs were affected by these measures.
The gaming industry as a whole has faced a tough year, grappling with increasing development costs and slow growth. Major companies like Sony Group, Take-Two Interactive Software, and Electronic Arts have also reduced their workforce and canceled high-profile projects. For instance, Sony recently canceled the big-budget multiplayer shooter Concord just two weeks after its release due to its slow start.
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Microsoft finalized the Activision acquisition in October, 21 months after its announcement. This acquisition has brought new content and talent to Xbox, but also presents the challenge of ensuring the deal’s long-term success.
Here is the full memo from Spncer:
Subject: Changes to Microsoft Gaming
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
Bill Kaczaraba is a content editor at MyNorthwest. You can read his stories here. Follow Bill on X, formerly known as Twitter, here and email him here.