Microsoft has implemented another round of heavy cuts to its Xbox gaming team following the acquisition of Activision Blizzard. In this latest round of layoffs, Microsoft is eliminating about 650 positions from its gaming team, but no additional studios have closed and no other games are canceled as a result of the move, which Microsoft Gaming CEO Phil Spencer confirmed on September 12. In January, Microsoft cut 1,900 gaming positions, bringing the number of cuts to the company to about 2,550 since the $75.4 billion deal to buy Activision Blizzard closed in October 2023.
In a memo to staff obtained by IGN, Spencer said the cuts came as part of Microsoft’s effort to align the company’s “post-acquisition team structure and managing our business.”
The approximately 650 layoffs from Microsoft Gaming “mostly” impact the “corporate and supporting” functions of the business, the company said. Affected staffers in the US are getting severance, extended healthcare, and outplacement services. Packages for those outside of the US are available, too, and vary by 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,” Spencer said. “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.”
In March, Spencer said the initial round of job cuts announced in January were necessary to help Xbox become a profitable business following the blockbuster buyout of Activision Blizzard.
In addition to laying off staff, Microsoft closed some of its studios entirely earlier this year, including Arkane Austin, Tango Gameworks, Roundhouse Games, and Alpha Dog Studios. Tango Gameworks was saved by PUBG studio Krafton, but the others have closed for good.
2024, like 2023 before it, has been a brutal for layoffs in the video game developers and staff at Microsoft and many other companies. Some estimates suggest there have been more than 11,000 layoffs in the video game sector in 2024 alone. A former PlayStation executive recently shared his thoughts on the cuts, claiming they are not due to corporate greed alone, but are instead part of general macroeconomic conditions. Ubisoft, Bungie, and many others have also implemented dramatic cuts in 2024.