The American tech giant, Microsoft, is again laying off around 650 employees from its gaming division. The head of Xbox, Phil Spencer sent an internal memo to employees this morning to announce the layoffs, The Verge reported
This is the second layoff occurring in Microsoft’s gaming division with the first one impacting nearly 2000 employees, right after the Activision Blizzard acquisition. In addition to that, the company closed down several studios including Tango Gameworks (Hi-Fi Rush).
Impact on Microsoft’s Gaming Division
In an internal memo shared with employees, Xbox head Phil Spencer explained the reasons behind the layoffs, emphasizing the need to align the team structure and manage business operations post-acquisition. Spencer confirmed that these cuts predominantly affect corporate and supporting roles across Microsoft Gaming.
“Our goal has been to minimize disruption while welcoming new teams and enabling them to do their best work,” Spencer wrote in the memo. “However, we have made the difficult decision to eliminate approximately 650 roles across Microsoft Gaming as part of aligning our post-acquisition team structure for long-term success.”
Phil Spencer reassured employees that Microsoft would provide support to those affected. In the US, impacted employees will receive severance packages, extended healthcare benefits, and outplacement services to assist them during their transition. For employees outside the US, the severance packages will vary according to local laws and regulations.
Despite these layoffs, Spencer was clear that no games, devices, or experiences were being cancelled, and no additional studios were being closed. He highlighted that these adjustments were necessary to position the company for future growth, allowing corporate teams to better support the studio teams and business units as they scale.
Microsoft’s gaming division has faced several challenging moments in the past year, but Spencer remained optimistic, expressing confidence in the team’s ability to adapt and continue delivering for their players. While these layoffs are challenging, the company remains focused on its long-term vision of supporting growth and delivering quality gaming experiences to its players.
Microsoft has faced significant criticism for its handling of layoffs and studio closures following the Activision Blizzard acquisition. Earlier in February, the tech giant laid off 1,900 employees and closed four game studios, sparking concern about the future of creativity and job stability in the gaming industry. While Microsoft may have acquired one of the biggest players in the gaming world, it raises the question—at what cost? These decisions, especially as AI continues to reshape industries, are having a lasting impact on the gaming sector, with many wondering about the balance between technological progress and human creativity.
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