Microsoft Lays Off Another 650 Xbox Employees

Microsoft axed over 650 jobs on September 12 from its Xbox division in a fresh round of layoffs. Earlier the company had fired 1,900 employees in January 2024. This move is part of Microsoft’s restructuring plans to streamline its gaming operations in the wake of its acquisition of Activision Blizzard.

“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,” Xbox chief Phil Spencer said in an internal memo.

Activision Blizzard is the company credited with popular video games such as Call of Duty, World of Warcraft, and Candy Crush Saga. After months of negotiations with regulators in the UK and theUS, Microsoft closed the $68.7 billion deal to acquire Activision Blizzard in October 2023.

The company has, however, assured that  layoffs will not lead to cancellation of any games, devices, or studio. On the contrary, the focus is on giving a make-over to the business to ensure long-term success.

Ever since Microsoft bought Activision Blizzard it has been making adjustments to the working programme of its gaming unit. 2,550 positions in total have been axed from Microsoft’s gaming team since the acquisition.

“With these changes, our corporate and support 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,” Spencer stated. 

The memo states that the layoffs will affect Microsoft employees both in the United States and other parts of the world. For those in the US, the company is providing exit packages that include severance pay, extended healthcare incentives, and outplacement services to help in their transition to new jobs. For employees outside the United States, the packages will vary according to regional guidelines and policies.

At the start of 2024, Microsoft had a 22,000-strong gaming division. It recently shut down several video game studios such as Redfall developer Arkane Austin.

Also Read: Silent Layoffs in the Tech Industry: A Growing Concern for IT Workers

Although Activision Blizzard has led to the increase in overall gaming revenue of Microsoft, sales of Xbox hardware has declined, signaling an upheaval in its business. The tech giant even had to release some of its exclusive games on rival platforms like Sony’s PlayStation to pump in more money.

Microsoft is now preparing to release a slew of new games and products. It is planning to launch Call of Duty: Black Ops 6 and new Xbox consoles. Microsoft is also working on making its games available across various consoles, PCs and cloud platforms.