Microsoft lays off 650 more Xbox employees after it fired 1,900 workers earlier this year

Microsoft has announced another round of layoffs, affecting 650 employees in its Xbox division. The job cuts are part of a broader restructuring following the acquisition of Activision Blizzard.

In Short

• Microsoft lays off 650 Xbox employees in second 2024 cut.
• The layoffs will mainly impact corporate and support roles post-Activision merger.
• Xbox laid off 1900 employees earlier this year

In a fresh wave of job cuts, Microsoft has announced the layoff of 650 employees from its Xbox division, marking the second major workforce reduction of the year within its gaming arm. The job cuts follow a previous workforce reduction of approximately 1,900 positions in January 2024. According to Microsoft, these layoffs are part of broader restructuring efforts aimed at streamlining its gaming operations, particularly following its high-profile acquisition of Activision Blizzard.

The news about the recent job cuts was revealed to employees through an internal memo from Microsoft's gaming chief, Phil Spencer. According to Spencer's memo, the latest round of layoffs will predominantly affect corporate and support roles within Microsoft's gaming division. Spencer assured employees that no games, devices, or experiences are being cancelled, and no studios will be closed as a result of these layoffs.

"For the past year, our goal has been to minimise disruption while welcoming new teams and enabling them to do their best work," Spencer stated in the memo. He emphasised the company's commitment to long-term success, saying, "With these changes, our corporate and support 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,” Spencer said in the internal memo, as reported by The Verge.

According to the Memo, the latest job cuts at Microsoft will impact employees both in the United States and internationally. For affected workers in the U.S., Microsoft is offering exit packages that include severance pay, extended healthcare benefits, and outplacement services to assist with the transition to new employment. Packages for employees outside the U.S. will differ based on regional guidelines and policies.

Spencer also mentioned that these layoffs would allow Microsoft's corporate and support teams to align better with the studio teams and business units. "Our teams will now be better supported with programs and resources that can scale to meet their needs," Spencer wrote.

Layoffs at Microsoft in 2024

Notably, the latest round of layoffs adds to the larger workforce reduction that occurred in January 2024. During that period, Microsoft laid off around 1,900 employees, including high-profile figures such as Mike Ybarra. The January layoffs followed Microsoft's $68.7 billion acquisition of Activision Blizzard, one of the largest deals in gaming history.

Since acquiring Activision Blizzard, Microsoft has been focused on minimising disruption while integrating new teams into its structure. According to Microsoft the restructuring is intended to help Microsoft Gaming’s corporate and support teams better align with the needs of studio teams and business units.