Microsoft job cuts continue, company lays off hundreds of employees in Xbox gaming division

• Microsoft has announced new job cuts.
• Hundreds of employees in gaming division will lose their jobs.
• Phil Spencer sent a memo to employees.

Microsoft and Activition Blizzard's deal made headlines in 2022 and was hailed as one of the biggest deals of the gaming industry. Blizzard, gaming giant behind popular titles like Call of Duty, was acquired by Microsoft for USD 69 billion. Since then, Microsoft has had two rounds of layoffs in its gaming unit. And now, the company is yet again in news for its decision to lay off hundreds of employees in the Xbox gaming division.

As per a report in Bloomberg, the layoffs, mostly affecting corporate and support roles, are part of Microsoft’s broader effort to streamline its gaming operations post-acquisition.

Microsoft Gaming CEO shares memo with employees

The Bloomberg report reveals that the company has decided to cut 650 jobs in its gaming division and the same was announced on Thursday.

Phil Spencer, CEO of Microsoft Gaming, addressed employees in a company memo, expressing that the decision was a difficult but necessary step to ensure long-term success for the business. “We are deeply grateful for the contributions of our colleagues who are learning they are impacted,” Spencer wrote according to Bloomberg.

He also said that the company is committed to supporting affected employees, offering severance packages, extended healthcare, and outplacement services in the U.S., with varying support depending on the location of impacted employees outside the country.

Despite the layoffs, Spencer reassured employees that no games, devices, or studios would be canceled or shut down as a result.

He also made it clear that the company remains focused on ensuring that Xbox and its gaming division continue to thrive. By making strategic adjustments now, Microsoft hopes to position itself for long-term growth in the gaming industry, a sector that is evolving rapidly with advancements in technology and increasing consumer demand.

Layoffs in tech

Microsoft’s decision to reduce its workforce in the gaming division is part of a broader trend of layoffs across the tech industry. Several major tech companies have announced significant job cuts this year as they face challenges in adapting to the post-pandemic business landscape. For Microsoft, these layoffs follow earlier job reductions across various divisions as the company seeks to become more efficient in its operations.

However, despite the cuts, Microsoft remains committed to its gaming division, which has become a crucial part of the company’s long-term strategy. The Xbox continues to play a key role in Microsoft’s vision for the future, especially as gaming becomes an increasingly significant part of the entertainment industry.