Microsoft is laying off 650 staff from its gaming business, according to a memo sent by Xbox chief Phil Spencer to staff on September 12. In the memo, Spencer said the roles affect mostly corporate and support functions and were made “to organize our business for long-term success.” He clarified that no games, devices, or experiences are being canceled and no studios are being closed as part of these cuts. These latest layoffs mean Microsoft has let go of 2,550 staff from its gaming business since acquiring Activision Blizzard for $69 billion in 2023.
In his memo, Spencer makes it clear that the cuts are related to the acquisition. Phil Spencer’s email to staff stated: “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.”
Spencer acknowledged the difficulty of the news for those impacted.
Microsoft complex gaming business layoffs
In the U.S., Microsoft is supporting affected employees 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.
Spencer emphasized that with these changes, Microsoft’s corporate and supporting teams and resources are aligned for sustainable future growth and can better support studio teams and business units with programs and resources that can scale to meet their needs. He also noted that 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. However, he reiterated that no games, devices, or experiences are being canceled and no studios are being closed as part of these adjustments.
These cuts follow earlier layoffs this year and continue the video game industry’s difficult period. In his remarks, Spencer acknowledged the challenges but emphasized the necessity of making hard decisions to ensure the long-term sustainability and growth of Microsoft’s gaming business.
