NAIROBI, Kenya- In a new round of layoffs, Microsoft is set to cut 650 jobs from its Xbox gaming division, marking a strategic shift after its colossal $69 billion acquisition of Activision-Blizzard.
The cuts will mainly affect staff in corporate and supporting roles, rather than those involved in game development or studio operations.
Microsoft, which laid off 1,900 employees in January, has been consolidating its gaming operations following several high-profile acquisitions.
The latest job cuts follow the closure of four studios earlier this year. However, Xbox boss Phil Spencer reassured employees in a memo that no games, devices, or experiences would be canceled, and no further studios would be shuttered as a result of this decision.
Spencer emphasized that these layoffs, which represent about 3pc of the gaming staff, are part of a broader effort to align the gaming division for “long-term success” post-acquisition.
“We’ve worked to minimize disruption as we bring new teams into the fold,” he said, noting that some non-gaming teams will feel the brunt of the changes as Microsoft continues to adapt its structure .
While Microsoft’s gaming revenue has seen a boost—largely thanks to its acquisition of Activision-Blizzard, which produces hits like Call of Duty and World of Warcraft—the company has faced declining hardware sales for the Xbox console.
To stay competitive, Microsoft has been ramping up its software offerings, showing off a strong lineup of upcoming games in a June showcase.
Titles such as Call of Duty: Black Ops 6 were received with excitement, and the showcase was praised as one of Xbox’s best in years .
Despite these wins, the company has sparked controversy by raising prices for its Game Pass service, which offers Netflix-style access to games, and by releasing some Xbox titles on rival platforms like PlayStation 5 and Nintendo Switch.
Notably, the upcoming Indiana Jones and the Great Circle will arrive on PS5 months after its Xbox debut .
Microsoft isn’t the only gaming giant navigating layoffs. The entire industry has seen massive cuts over the last two years, following a pandemic-era boom in profits and player numbers.
Companies like Sony, Riot Games, and Epic Games have also laid off hundreds of workers as they adjust to the post-pandemic reality.
For Microsoft, which faced criticism for shutting down acclaimed studios like Arkane Austin and Tango Gameworks, these latest cuts underscore the ongoing challenges in balancing growth with sustainability .
