Microsoft to cut 650 jobs in gaming division after $69bn activision-Blizzard Merger
Microsoft, the owner of Xbox, is set to cut approximately 650 jobs from its gaming division in a fresh round of layoffs following its $69bn (£54.3bn) merger with Activision-Blizzard. The job losses will affect staff in “mostly corporate and supporting functions” worldwide, the company announced.
This comes after Microsoft laid off 1,900 employees in January and closed four game studios in May that had been acquired before the Activision-Blizzard deal. Despite these layoffs, Xbox boss Phil Spencer assured employees that no games, devices, or studios would be shut down as part of this latest round of cuts.
In a memo shared online and verified by the BBC, Spencer explained that the layoffs represent about 3% of Microsoft’s gaming workforce. He said the cuts were necessary to “align our post-acquisition team structure” and ensure the company’s long-term success. While games and studios remain unaffected, Spencer noted that other teams would face challenges as they adapt to new priorities and manage game lifecycles.
Spencer acknowledged the difficulty of the news and thanked the affected employees for their contributions to the company.
The gaming industry has seen widespread layoffs over the past two years, following a surge in investments and acquisitions during the pandemic, which brought record profits and player engagement. Companies like Sony, Riot Games, and Fortnite creator Epic have also laid off hundreds of workers.
Microsoft faced significant criticism earlier this year for closing well-regarded studios Arkane Austin and Tango Gameworks. Speaking in a June interview, Spencer noted that he was expected to run a “sustainable” gaming business and deliver growth for the company.
Despite the job cuts, Microsoft’s latest financial report shows an increase in gaming revenues, largely attributed to its acquisition of Activision-Blizzard, the producer of hit titles such as World of Warcraft, Diablo, and Overwatch. However, sales of Xbox hardware have declined, prompting the company to focus on expanding its software and services.
In June, Xbox unveiled a series of upcoming games, including Call of Duty: Black Ops 6, which was praised as one of the best showcases in years. However, Microsoft has faced backlash for raising the prices of its Game Pass subscription service and for releasing some previously exclusive titles on rival platforms like PlayStation 5 and Nintendo Switch. One of the major upcoming Xbox releases, Indiana Jones and the Great Circle, will be available on PlayStation 5, although several months after its Xbox launch.
