Microsoft Gaming to Lay Off 3% of Workforce, 650 Employees

Microsoft Gaming will lay off approximately 650 employees, or 3% of the Xbox owner’s global workforce, in a new round of eliminations following last year’s completion of its Activision Blizzard acquisition.

The cuts will primarily impact staffers in “corporate and supporting functions,” per Microsoft Gaming CO Phil Spencer.

“For the past year, our goal has been to minimize disruption while welcoming new teams and enabling them to do their best work,” Spencer said in an email to staff Thursday, which was obtained by Variety. “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.”

U.S. employees will receive exit packages that include severance, extended healthcare and outplacement services, while international employees will receive different packages dependent on their location, per Spencer.

While Spencer says there will also be “some impacts to other teams as they adapt to shifting priorities and manage the lifecycle and performance of games,” there are no video game titles, devices or “experiences” being canceled as a result of these layoffs, and no studios will be closed.

These mark the most recent round of layoffs Microsoft has undergone since its 2023 closure of the Activision Blizzard acquisition, and the latest cuts amid an industry-wide wave of eliminations across gaming companies this year, including Sony Interactive, Riot Games, Take-Two Interactive, EA and more.

Back in January, the company announced it would be laying off 1,900 employees, roughly 8% of its workforce at that time, across divisions Xbox, Activision Blizzard and ZeniMax.

In May, Microsoft shuttered three studios, Arkane Austin, Alpha Dog Studios and Tango Gameworks, run by its subsidiary Bethesda Softworks, and merged a fourth, Roundhouse Games, with its “The Elder Scrolls Online” team under ZeniMax Online Studios.

See below for Spencer’s full memo to Microsoft Gaming staff.

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