Microsoft will reportedly lay off 650 employees in its gaming division, according to an internal memo sent to employees by Xbox CEO Phil Spencer, which has been published by IGN and Game File.
The latest round of layoffs comes after the company cut 1,900 jobs in its video game division in January, and comes at a time of particularly tough layoffs for the gaming industry as a whole.
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“As part of our ongoing efforts to restructure and manage our business post-acquisition, we have decided to eliminate approximately 650 positions within Microsoft Gaming (primarily in corporate and support functions) to organize our business for long-term success,” Spencer wrote in the memo.
He added: “Today’s changes will not cancel any games, devices, or experiences, nor will they close any studios.”
The full memo, as released by IGN and Game File, is below:
“Over the past year, our goal has been to minimize disruption while welcoming new teams and enabling them to perform at their best. As part of our ongoing efforts to structure and manage our business post-acquisition, we have decided to eliminate approximately 650 positions within Microsoft Gaming, primarily in corporate and support functions, to organize our business for long-term success.
“I know this is difficult news to take. We are grateful for the contributions of our colleagues who learned they were impacted. In the U.S., we are providing separation packages, extended health care, and outplacement services to help them transition; outside the U.S., compensation will vary by location.
“With these adjustments, our company and support teams and resources will be prepared for future sustainability and will be better able to provide scalable plans and resources to our studio teams and business units to meet their needs. In addition, as part of business operations, other teams will also be affected as they need to adapt to changing priorities and manage the life cycle and performance of games. Today’s adjustments will not cancel any games, devices or experiences, and no studios will be closed.
“Throughout our history as a team, we have had great moments and we have also experienced challenges. Today was one of those challenging days. I know it is difficult to go through more changes like this, but even in the toughest of times, this team has been able to come together with care and kindness for one another and continue to be there for our players. We appreciate your support as we navigate these changes and thank you for your compassion and respect for one another.”
As Spencer mentioned in the memo, Microsoft and Xbox acquired the king of Activision Blizzard for $68.7 billion in 2023. In addition to the layoffs in January, the recent layoffs also came after Microsoft closed several Xbox-owned studios in May, including Hi-Fi Rush developer Tango Gameworks and Redfall developer Arkane Austin.
“This is obviously a [the teams affected]”I wanted to make sure that we did the right thing for everybody on the team, both in terms of severance and other things. This wasn’t about my PR, this wasn’t about Xbox PR. This was about those teams,” Spencer said during an IGN Live stream in June regarding the closures of those studios. He continued, “At the end of the day, I’ve said over and over again that I have to run a sustainable business within the company and keep growing it, and that means sometimes I have to make hard decisions, and frankly, those are not decisions that I enjoy making, but they’re decisions that someone needs to make.”
