Microsoft is letting 650 employees go across its gaming division, amounting to around 3% of its global workforce, as revealed in an internal memo from Phil Spencer, CEO of Microsoft Gaming. The announced cuts follow last year’s $68.7 billion acquisition of Activision Blizzard and a punishing round of job cuts in January of this year.
Spencer Cites Activision Blizzard Acquisition in Memo
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In his message to employees, Phil Spencer points specifically to a post-acquisition strategy as the main driver for the latest cuts. In his memo, he states:
“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.” He goes on to clarify that “no games, devices or experiences are being canceled and no studios are being closed as part of these adjustments”.
The full text of Spencer‘s memo is reproduced below:
“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.
I know that this is difficult news to hear. We are deeply grateful for the contributions of our colleagues who are learning they are impacted. In the U.S., we’re supporting them 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.
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. Separately, as part of running the business, there are some impacts on other teams as they adapt to shifting priorities and manage the lifecycle and performance of games. No games, devices, or experiences are being canceled and no studios are being closed as part of these adjustments today.
Throughout our team’s history, we have had great moments, and we have had challenging ones. Today is one of the challenging days. I know that going through more changes like this is hard, but even in the most trying times, this team has been able to come together and show one another care and kindness as we work to continue delivering for our players. We appreciate your support as we navigate these changes and we thank you for your compassion and respect for each other.”
The latest round of layoffs continues Microsoft’s belt-tightening trend from earlier in the year, when they cut 1900 gaming jobs, largely from the newly absorbed Activision Blizzard teams. This included the cancellation of the in-development survival game Odyssey, the shuttering of studios Tango Gameworks and Arkane Austin, and the departure of Blizzard Entertainment President Mike Ybarra and chief design officer and co-founder Allen Adham.
That turmoil reflects difficulties faced by the broader gaming industry, with over 20,000 layoffs hitting studios globally in 2023 and 2024. With under 400 million people in the industry worldwide, that number represents a significant percentage of the global workforce, as developers struggle to contend with a post-pandemic downturn in player count and the fallout from large-scale corporate consolidation and shareholder subservience.
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