Microsoft, the tech giant, has announced the layoff of 650 employees in its gaming division. This move comes just months after the company laid off 1,900 employees in the same division following its massive $68.7 billion acquisition of Activision Blizzard.
Xbox chief Phil Spencer confirmed the layoffs in an internal memo, stating that the cuts are part of a restructuring effort to integrate Activision Blizzard’s teams and streamline operations for long-term success. While the layoffs are significant, Spencer assures employees that no games, devices, or experiences are being canceled, and no studios are closing.
The layoffs primarily affect corporate and supporting functions within Microsoft Gaming, impacting roughly 8% of its overall gaming workforce, which currently stands at approximately 22,000 employees. Microsoft is offering affected employees severance packages, extended healthcare, and outplacement services to aid their transition.
This latest round of layoffs is part of a broader restructuring trend within Microsoft’s gaming division that began earlier this year. In July, the company executed another round of layoffs across various teams and regions, although the exact number of affected employees was not disclosed.
The acquisition of Activision Blizzard in October 2023, after securing approval following the sale of Activision’s game streaming rights to Ubisoft Entertainment, has significantly impacted Microsoft’s gaming landscape. These layoffs are a direct consequence of the ongoing integration process and the company’s efforts to streamline operations after the acquisition.
Microsoft’s shares closed 2.2% up at $423.33 on Wednesday, and in premarket trading on Thursday, the stock was marginally up by 0.04% at the time of writing.
