Microsoft has announced another round of layoffs in its gaming division, cutting 650 jobs as part of ongoing restructuring efforts following the $68.7 billion acquisition of Activision Blizzard. This marks the third wave of layoffs since the deal, bringing the total number of job cuts in the gaming business to 2,550. In an internal memo, Xbox chief Phil Spencer assured employees that the layoffs would not impact games, devices, or studios.
Instead, the cuts primarily target corporate and support functions, particularly in HR and marketing roles. Spencer emphasized the need to “organize our business for long-term success” and align resources for sustainable growth. Affected employees will receive severance packages, extended healthcare, and outplacement services, with specific provisions varying by location.
Microsoft announces third wave layoffs
The gaming industry continues to face significant strain, with workforce reductions becoming increasingly common across companies like Sega, EA, and smaller studios such as Deck Nine and CI Games. The Communications Workers of America union (CWA) has denounced the layoffs as “extremely disappointing.” In a statement, Samuel Cooper, a senior producer and member of WoWGG-CWA, criticized Microsoft, stating that the company could have achieved its goals for long-term success without destroying the livelihoods of 650 employees.
“While we would hope that a company like Microsoft with $88 billion in profits last year could achieve ‘long-term success’ without destroying the livelihoods of 650 of our colleagues, heartless layoffs like these have become all too common,” Cooper said. “We stand in solidarity with everyone who lost their job and encourage all video game workers to form unions so we can protect each other.”
These latest layoffs underscore the ongoing pressures facing major gaming companies. While recent acquisitions have driven a marked increase in gaming revenue for Microsoft, much of this growth stems from the acquired portfolio rather than from organic improvements in Microsoft’s pre-existing gaming operations.
As Microsoft positions these layoffs as a move towards greater long-term alignment, the potential impact on employee morale and creative output remains a critical concern. Stakeholders will closely monitor Microsoft’s ability to sustain the performance of its newly acquired assets and deliver on broader strategic promises.
