In a new round of layoffs, Microsoft has announced that 650 employees from its Xbox gaming division will be let go, marking the latest workforce reduction as the company continues to integrate Activision Blizzard into its operations. The announcement came in an internal memo from Microsoft Gaming CEO Phil Spencer, which was shared by gaming outlets such as Game File and IGN. Despite the job cuts, Spencer emphasized that no new games would be cancelled, and no studios would be shuttered as a result.
The layoffs, Spencer explained, are primarily affecting “corporate and supporting functions” as Microsoft works through the complexities of its $69 billion acquisition of Activision Blizzard. This acquisition, finalized last October after a drawn-out battle with regulators, brought major franchises like Call of Duty under Microsoft’s umbrella. According to Spencer, the cuts are a necessary step in the ongoing integration of the two companies, but he reassured that the core gaming operations remain unaffected.
“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,” Spencer wrote. He also highlighted that no major game projects or studios are being cancelled as part of this latest adjustment, a point of concern for many in the gaming community given previous cuts.
Earlier this year, Microsoft announced 1,900 layoffs, which saw significant reductions in game development staff across several studios. Those cuts included the cancellation of an unannounced fantasy survival game at Blizzard. In May, further restructuring led to the closure of studios like Tango Gameworks—creators of Hi-Fi Rush—and Arkane Austin, known for Prey. Notably, Tango Gameworks has since been revived under South Korean publisher Krafton.
As Microsoft continues to navigate its acquisitions and restructuring efforts, the company remains focused on maintaining its gaming portfolio while streamlining operations to align with its evolving priorities.
