Microsoft is Laying Off 650 More Employees in its Gaming Division

Microsoft is laying off 650 more employees in its gaming division. This is the second round of layoffs to hit Microsoft’s gaming arm this year following 1,900 job cuts in January.

In an email to team members obtained by Game File, Phil Spencer, CEO of Microsoft Gaming explained that Microsoft had more streamlining to do following its massive acquisition of Activision Blizzard last year. The gaming executive also said that these layoffs will impact “mostly corporate and supporting functions,” and that “No games, devices or experiences are being cancelled.”

The previous job cuts Microsoft announced earlier this year led to the closure of Arkane Austin, the developer of Prey and Redfall, as well as the Japan-based studio Tango Gameworks. The latter has since been acquired by PUBG: Battlegrounds developer Krafton, which also obtained the rights for the critically-acclaimed Hi-Fi Rush IP.

As Phil Spencer reiterated in his memo to employees, the Microsoft Gaming team is making these changes “to organize our business for long-term success.” As the world is still adjusting to a post-pandemic reality, Microsoft is far from being the only video game company to announce some layoffs. However, after spending $68 billion to acquire Activision Blizzard, Microsoft now needs to make the right moves to ensure “sustainable future growth,” as Spencer said.

You can read Phil Spencer’s full email to employees 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 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