Microsoft Slashes 3% of Workforce, Impacting Thousands

Microsoft has announced job cuts affecting about 3% of its workforce, translating to around 6,000 employees. This move is part of a strategy to streamline management across various teams and respond to market dynamics. The company, which had 228,000 employees as of mid-2024, has previously made significant reductions within its gaming division. Prior layoffs included 1,900 workers earlier that year, and in total, around 2,550 employees have been let go since Microsoft's acquisition of Activision Blizzard for $69 billion in 2023. Xbox head Phil Spencer emphasized the necessity of these tough decisions to sustain and grow the business.

The impact on Microsoft's video game division remains unclear; however, it has already seen significant layoffs affecting major studios, including Tango Gameworks and Arkane Austin. The restructuring may enable Microsoft to focus on optimizing operations and strengthening its competitive positioning in the gaming market.

The layoffs coincide with Microsoft's strategic acquisition of Activision Blizzard, which was aimed at bolstering its gaming portfolio. This acquisition has positioned Microsoft to compete more vigorously in the gaming industry, particularly with its Xbox Game Pass service, which has been instrumental in growing its user base. The changes within Microsoft reflect the broader trends of consolidation and adaptation to market demands in the gaming sector.