Microsoft Cuts 650 Jobs in Gaming Division, Phil Spencer Responds

Microsoft has announced a significant workforce reduction, laying off around 650 staff across its gaming business. This decision, which primarily affects corporate and support functions, aims to streamline operations following the acquisition of Activision Blizzard for $69 billion. Xbox chief Phil Spencer clarified in an internal memo that no games, devices, or studios are being canceled as a result of these layoffs. This comes after a prior round of layoffs earlier this year, totaling 1,900 staff, as Microsoft seeks to align its business structure for sustainable growth.

Despite the layoffs, Microsoft’s gaming revenue has shown remarkable growth, primarily due to the impact of the Activision Blizzard acquisition. Gaming revenue increased by 44% year-over-year, driven by higher sales of Xbox content and services. Spencer has indicated a focus on strengthening the gaming franchise as the company explores opportunities across different platforms, including a rumored handheld device.

Microsoft is laying off staff to streamline its operations and organize for long-term success following its acquisition of Activision Blizzard. The cuts mainly impact corporate and support roles, aiming to align resources better with future growth needs.

The Xbox gaming landscape has been evolving ever since Microsoft acquired Activision Blizzard in 2023. With popular franchises like Call of Duty in its portfolio, Microsoft is positioning itself to enhance its offerings on platforms, including the Game Pass subscription service. Upcoming releases such as Call of Duty: Black Ops 6 and Indiana Jones and the Great Circle signify its commitment to delivering strong titles across various gaming mediums.