[Updated] Microsoft is Laying Off More Employees at Xbox, Zenimax, and King

Microsoft kicked off its new fiscal year today, and as it was previously reported, the company is doing another round of layoffs. According to The Seattle Times, approximately 9,000 employees will be impacted, which represents approximately 4% of the company’s workforce.

Bloomberg and Windows Central separately confirmed that the job cuts are affecting multiple teams within the Xbox division. This is the fourth round of layoffs to affect Microsoft’s gaming arm over the past 18 months, and it looks like the company’s massive $68 billion acquisition of Activision Blizzard is forcing it to streamline its operations even further.

Bloomberg is reporting that Candy Crush developer King will be laying off 10% of its employees at its Barcelona-based offices as a result of the job cuts. The layoffs are also reportedly affecting other European teams, including people working at Zenimax. US teams are also expected to be impacted, though details are currently unknown.

Windows Central also shared today an internal email to staff from Microsoft Gaming CEO Phil Spencer. The carefully-worded statement emphasizes that the layoffs “come at a time when we have more players, games, and gaming hours than ever before,” but adds that the company “must make choices now for continued success.”

You can find Phil Spencer’s full email below:

Today we are sharing decisions that will impact colleagues across our organization. To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organizational shifts will be shared by your team leaders in the coming days.

I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger. The success we’re seeing currently is based on tough decisions we’ve made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities. We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come.

Prioritizing our opportunities is essential, but that does not lessen the significance of this moment. Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted. These decisions are not a reflection of the talent, creativity, and dedication of the people involved. Our momentum is not accidental—it is the result of years of dedicated effort from our teams.

HR is working directly with impacted employees to provide severance plan benefits (aligned with local laws), including pay, healthcare coverage, and job placement resources to support their transition. Employees whose roles were eliminated are encouraged to explore open positions across Microsoft Gaming, where their applications will be given priority review.

Thank you to everyone who has shaped our culture, our products, and our community. We will move forward with deep appreciation and respect for all who have contributed to this journey.

Phil

Update 12:10 PM ET: I previously wrote that the Xbox team was being hit the hardest by this latest round of layoffs, and this was an extrapolation from me based on the multiple reports focusing on the gaming job cuts. I updated the post to reflect that, and I’ve also received the following statement from a Microsoft spokesperson. “We continue to implement organizational and workforce changes that are necessary to position the company and teams for success in a dynamic marketplace.”