Microsoft lays off another 650 staff, but promises no studio closures or game cancellations

Another set of sweeping layoffs are hitting Microsoft’s gaming business, with 650 employees being made redundant across Xbox, Bethesda and Activision Blizzard. The news comes via an internal memo sent by Xbox boss Phil Spencer to staff.

Made public by IGN, Spencer explains that the impact will mainly be felt in the corporate and support function positions, “to organize our business for long term success.” He also stated that “No games, devices or experiences are being cancelled and no studios are being closed as part of these adjustments today.”

All those being laid off in the US will receive severance pay, extended healthcare and outplacement services. The package will differ in other countries.

Following on from layoffs at the start of 2024, Microsoft has now cut 2,550 jobs since it acquired Activision Blizzard in late 2023. That acquisition had led to the company’s gaming workforce suddenly ballooning up to around 22,000 people at the end of last year, and with years of acquisitions that had brought multiple separate publishing arms and labels together, some kind of layoffs and restructuring were pretty much inevitable. Those earlier layoffs, however, saw the announced closure of Tango Gameworks – since rescued – and Arkane Austin, and the spin off of Toys For Bob.

There’s been a terrible toll taken on the staff of the games industry over the last couple years, as economic sands have shifted and company leadership decide to make job cuts. We wish all those affected by this latest round of layoffs all the best in finding new work.

Here’s Spencer’s full email to staff:

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 to other teams as they adapt to shifting priorities and manage the lifecycle and performance of games. No games, devices or experiences are being cancelled 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.

Phil

Source: IGN

Tags: Activision Blizzard, Bethesda, Microsoft, Xbox