Microsoft announces the layoff of 650 support positions in its Xbox Games unit.

Microsoft Announces Layoffs: 650 Support Roles Cut in Xbox Games Division Amid Strategic Restructuring

Written by: Supriya Kadu

Edited by: Omkar Devadkar

Last Updated: September 13, 2024

Summary: To reduce expenses and integrate the $69 billion acquisition of Activision Blizzard Inc., Microsoft Corp. is cutting off 650 workers in its Xbox division.

According to reports, Microsoft Corp. is laying off 650 employees in its Xbox division. This is the third round of layoffs the company has experienced this year as it works to cut expenses and integrate Activision Blizzard Inc., which it paid $69 billion to acquire.

According to the agency report, Xbox CEO Phil Spencer wrote a note to staff on Thursday stating, “We have decided to eliminate approximately 650 roles across Microsoft Gaming—mostly corporate and supporting functions—to organize our business for long-term success.”

In the first half of the year, the gaming industry faced massive layoffs, studio closures, and project cancellations due to a sluggish recovery in player engagement rates following the pandemic peak.

Employees at Xbox had been bracing for more layoffs following Microsoft's 1,900 job cuts in January, many of which came from Activision divisions and studios, according to the article. As per the report, the business declared the closure of four studios that it had purchased as part of its $7.5 billion acquisition of ZeniMax; however, one of the four was subsequently sold.

It's not just Microsoft that is witnessing it; the game industry as a whole is experiencing it. The report claims that three major companies—Sony Group Corp., Take-Two Interactive Software Inc., and Electronic Arts Inc.—have slashed staff and abandoned high-profile projects.

Sony had little patience for a game that had a poor start and canceled its high-budget multiplayer shooter Concord this month, only two weeks after it launched.

The multinational giant Microsoft closed the Activision acquisition in October, 21 months after it was first announced and following a protracted fight for antitrust clearance. The acquisition provided Xbox with a boost in new talent and content and the challenge of making the merger work in the long run.