Microsoft is reportedly laying off 650 staff from its gaming division, according to an internal memo sent by Xbox CEO Phil Spencer to to staff, which has been published by both IGN and Game File.
This latest round of cuts would follow the company laying off 1,900 staff from its video game division back in January this year, and come amid what’s been an incredibly torrid year games industry-wide on the layoff front.
In the memo, Spencer wrote: “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.”
He added that: “No games, devices or experiences are being cancelled and no studios are being closed as part of these adjustments today.”
The full memo published by IGN and Game File can be read below:
“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 U.S., we’re supporting them with exit packages that include severance, extended healthcare, and outplacement services to help with their transition; outside the U.S. 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.”
As Spencer alludes to in the memo, Microsoft and Xbox acquired Activision Blizzard King in a $68.7 billion deal in 2023. In addition to following that January round of layoffs, these latest cuts also follow Microsoft shutting down several studios under the Xbox umbrella, including Hi-Fi Rush developer Tango Gameworks and Redfall developer Arkane Austin in May.
“It’s obviously a decision that’s very hard on [the teams affected], and I want to make sure through severance and other things that we’re doing the right thing for the individuals on the team. It’s not about my PR, it’s not about Xbox PR. It’s about those teams,” Spencer said regarding the closure of those studios during an IGN Live stream in June. He continued: “In the end, I’ve said over and over, I have to run a sustainable business inside the company and grow, and that means sometimes I have to make hard decisions that frankly are not decisions I love, but decisions that somebody needs to go make.”
