Microsoft suddenly lays off 650 more Xbox employees amid post -Activision-Blizzard acquisition restructuring

Microsoft has announced the layoff of approximately 650 Xbox employees. This latest round of job cuts, revealed by Xbox chief Phil Spencer in an internal memo, marks the second major workforce reduction in 2024, after the company laid off 1,900 employees earlier this year.

The layoffs are primarily aimed at corporate and support roles within Microsoft Gaming, with the goal of aligning the company’s post-acquisition team structure for long-term success. Spencer emphasized that no games, devices, or experiences are being canceled, and no studios are being closed as part of these adjustments.

Phil Spencer’s memo

Phil Spencer

The memo, obtained by The Verge, outlines the rationale behind the Xbox employees being laid off: “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,” Spencer stated.

The affected employees will receive exit packages that include severance pay, extended healthcare benefits, and outplacement services to assist with their transition. Packages for employees outside the U.S. will differ based on regional guidelines and policies.

This move comes after Microsoft completed its $68.7 billion acquisition of Activision Blizzard in October, following months of regulatory battles in the UK and US. The acquisition has led to significant restructuring efforts within Microsoft’s gaming division, including the closure of several game studios, such as Arkane Austin, known for the game Redfall.

The layoffs are part of a broader effort to streamline Microsoft’s gaming operations and position the company for sustainable future growth. Spencer assured employees that the changes will enable corporate and support teams to better support studio teams and business units with scalable programs and resources.

Full Memo from Phil Spencer

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

650 Xbox employees layoff summary

• Layoffs: Microsoft lays off approximately 650 employees from its Xbox division, primarily in corporate and support roles.
• Reason: The layoffs are part of post-acquisition restructuring efforts following the acquisition of Activision Blizzard.
• No cancellations: No games, devices, or experiences are being canceled, and no studios are being closed as part of these adjustments.
• Support: Affected employees will receive exit packages including severance pay, extended healthcare benefits, and outplacement services.
• Acquisition: The layoffs follow Microsoft’s $68.7 billion acquisition of Activision Blizzard in October.

The latest layoffs at Microsoft’s Xbox division underscore the significant challenges the company faces in integrating its recent acquisition of Activision Blizzard. While the layoffs are aimed at streamlining operations for long-term success, they also highlight the human cost of such restructuring efforts. As Microsoft continues to navigate these changes, it remains committed to supporting its employees and delivering quality gaming experiences to its players.