Microsoft to Cut 650 Additional Xbox Jobs Amid Ongoing Activision-Blizzard Acquisition

Xbox faced more troubling news today as it announced an additional 650 layoffs, following the 1,900 job cuts from Xbox and Activision-Blizzard employees in January 2024. This represents another 3% of Microsoft’s workforce.

“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

Phil Spencer, Head of Xbox, delivered the news to staff, once again attributing the layoffs to the company’s “post-acquisition” phase following the Activision-Blizzard deal.

Details about where these layoffs have occurred remain unclear, but further updates are expected throughout the day. In the previous round of layoffs, the FTC raised concerns, stating that the new job cuts contradicted Microsoft’s earlier statements regarding the acquisition. It remains to be seen if this latest round of layoffs will reignite those discussions.

Two key issues are at play here: large-scale layoffs are often part of major mergers, and this certainly contributes to the current situation. However, Xbox is also grappling with other challenges, including underwhelming console performance this generation, stagnant growth in Xbox Game Pass subscribers, and a first-party game strategy that sends some of its biggest titles to PlayStation.

Unfortunately, this latest wave of layoffs adds to the thousands of workers in the gaming industry who have been affected by widespread job cuts over the past two years.