Game Over: Woke Microsoft Lays Off 650 Employees from Xbox Division

Woke tech giant Microsoft has announced a round of layoffs affecting 650 employees within its Xbox gaming unit, marking the third gaming-related layoff since the company’s acquisition of Activision Blizzard for $69 billion.

CNBC reports that in a memo sent to employees on Thursday, Phil Spencer, CEO of Microsoft Gaming, revealed that the company had made the “difficult” decision to cut 650 roles at its Xbox division. The layoffs primarily affect corporate and supporting functions, as Microsoft aims to align its post-acquisition team structure and position the business for long-term success.

Spencer expressed the company’s gratitude for the contributions of the affected employees, stating, “We are deeply grateful for the contributions of our colleagues who are learning they are impacted.” He assured that those affected in the US would receive support through exit packages, including severance, extended healthcare, and outplacement services to aid in their transition. Packages for employees outside the US will vary according to location.

The memo also indicated that there would be some impact on other teams as they adapt to shifting priorities and manage the lifecycle and performance of games. However, Spencer emphasized that no games, devices, or gaming experiences are being canceled, and no studios would be closed as a result of the redundancies.

Microsoft’s gaming division has undergone significant changes in recent years, with the company acquiring ZeniMax Media, the owner of Bethesda Softworks, for $7.5 billion in 2021. The acquisition of Activision Blizzard, the publisher behind the popular Call of Duty franchise, for $69 billion in cash, has further reshaped the company’s gaming landscape.

The layoffs at Xbox are part of a broader trend in the video game industry, with several major gaming studios cutting thousands of jobs worldwide since the beginning of 2023. Sony, Unity, Twitch, Playtika, and Discord have all announced substantial rounds of layoffs in recent months.

For Xbox, the layoffs have been particularly severe. In January, just three months after closing the Activision Blizzard acquisition, Microsoft cut 1,900 jobs in its gaming division. In May, the company announced the closure of several gaming studios, including Arkane Austin, Tango Gameworks, and Alpha Dog, resulting in additional layoffs.

Despite the challenges faced by the gaming industry, Spencer assured employees that the changes were necessary for the sustainable future growth of Microsoft Gaming. He emphasized that the corporate and supporting teams and resources were now aligned to better support studio teams and business units with programs and resources that can scale to meet their needs.

As Microsoft navigates these changes, Spencer acknowledged the difficulty of the situation and appreciated the team’s ability to come together and show care and kindness to one another during trying times. He thanked employees for their support and compassion as they continue to deliver for their players.
Read the full memo below:

Subject: Changes to Microsoft Gaming

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 US, we’re supporting them with exit packages that include severance, extended healthcare, and outplacement services to help with their transition; outside the US 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