Microsoft has Cut 2,500+ Gaming Division Jobs since Activision Blizzard Buy

Microsoft is cutting 650 additional jobs from its gaming division, fundamentally affecting corporate and support roles, according to an Xbox memo from Phil Spencer. This decision is part of the company's transforming efforts following last year's accession of Activision Blizzard.

Phil Spencer assured employees that no games, devices, or studios are being shut down due to these layoffs. Instead, the focus is on restructuring the business to ensure long-term success. He reported that these changes focus on supporting the company’s game studios and business units more effectively.

Since obtaining Activision Blizzard for $69 billion in 2023, Microsoft has been adapting its gaming operations. These recent job cuts follow an earlier reduction of 1,900 employees this year, totaling 2,550 positions removed from Microsoft’s gaming division since the acquisition.

Despite a boost in gaming income from Activision Blizzard, other areas of Xbox are facing challenges. Xbox hardware sales have declined, and Microsoft has even released some exclusive games on competing platforms like PlayStation to boost income.

Despite these challenges, the gaming division's overall revenue has increased, largely due to Activision Blizzard's impact. The company is also gearing up to launch several new games and products, including Call of Duty: Black Ops 6 and new Xbox consoles.

Microsoft’s gaming business continues to evolve, with a focus on making its games accessible across consoles, PCs, and cloud platforms. While the layoffs are tough, Spencer emphasizes that these changes are crucial for ensuring the company’s future growth and success.

Here's the full memo sent by Phil Spencer : 

Over the past year, our goal has been to minimize disruption while integrating new teams and enabling them to excel. To better align our post-acquisition team structure and manage our business effectively, we have decided to eliminate approximately 650 roles across Microsoft Gaming, primarily in corporate and support functions, to position the company for long-term success.

We understand this news is difficult. We deeply appreciate the contributions of those affected. In the U.S., we are offering exit packages that include severance, extended healthcare, and outplacement services to aid their transition; packages outside the U.S. will vary by location.

These changes align our corporate and support teams for sustainable future growth, allowing them to better assist our studio teams and business units with scalable programs and resources. Meanwhile, other teams will experience impacts as they adjust to shifting priorities and manage the lifecycle and performance of games. Importantly, no games, devices, experiences, or studios are being canceled or closed as part of these adjustments.

Our team has seen both great and challenging moments throughout its history, and today is one of the latter. I understand that enduring additional changes is difficult, but even in tough times, this team has consistently come together with care and kindness to continue serving our players. We appreciate your support as we navigate these transitions and thank you for your compassion and respect towards one another.