Microsoft Gaming will lay off about 650 employees, or three percent of the Xbox owner’s global workforce, in a new round of layoffs following its acquisition of Activision Blizzard, which was completed last year.
According to Phil Spencer, CEO of Microsoft Gaming, the cuts will primarily affect employees in “corporate and support functions.”
“Over the past year, our goal has been to minimize disruption while welcoming new teams and enabling them to do their best work,” Spencer said Thursday in an email to employees obtained by diversity“As part of the realignment of our team structure following the acquisition and management of our business, we have made the decision to eliminate approximately 650 positions at Microsoft Gaming – primarily corporate and support functions – to position our business for long-term success.”
U.S. employees receive severance packages that include severance pay, extended health insurance and outplacement services, while international employees receive different packages depending on their location, Spencer said.
While Spencer says there will also be “some impact on other teams as they adapt to changing priorities and manage the lifecycle and performance of games,” no video game titles, devices or “experiences” will be canceled as a result of these layoffs, nor will any studios be closed.
These are the latest wave of layoffs at Microsoft since the completion of its acquisition of Activision Blizzard in 2023, and the latest cuts in an industry-wide wave of layoffs at gaming companies this year, including Sony Interactive, Riot Games, Take-Two Interactive, EA and others.
Back in January, the company announced that it would lay off 1,900 employees in its Xbox, Activision Blizzard and ZeniMax divisions, or around 8% of its workforce at the time.
In May, Microsoft closed three studios – Arkane Austin, Alpha Dog Studios and Tango Gameworks – operated by its subsidiary Bethesda Softworks, and merged a fourth, Roundhouse Games, with its “The Elder Scrolls Online” team to form ZeniMax Online Studios.
Below is Spencer’s full memo to Microsoft Gaming employees.
Subject: Changes to Microsoft Gaming
Over the past year, our goal has been to minimize disruption, onboard new teams, and enable them to do their best work. As part of restructuring our team structure following the acquisition and managing our business, we have decided to eliminate approximately 650 positions at Microsoft Gaming – primarily corporate and support roles – to position our business for long-term success.
I know this is difficult news. We are deeply grateful for the contributions of our colleagues who learn they are impacted. In the U.S., we are supporting them with severance packages that include severance pay, extended health insurance and outplacement services to help them make the transition. Outside the U.S., packages vary by location.
With these changes, our corporate and support teams and resources are positioned for sustainable future growth and can better support our studio teams and business units with programs and resources that adapt to their needs. That said, as part of running the business, there is some impact to other teams as they adapt to changing priorities and manage the lifecycle and performance of games. As part of these adjustments, no games, devices, or experiences are being canceled today, and no studios are being closed.
Throughout our team’s history, there have been great moments, but also challenging ones. Today is one of those challenging days. I know it’s hard to go through more changes like this, but even in the most difficult times, this team has managed to stick together and show care and kindness to one another as we work to continue to provide the best for our players. We appreciate your support as we navigate these changes, and thank you for your compassion and respect for one another.
Phil
