Xbox layoffs: Microsoft cuts 650 jobs following $69 billion Activision deal

Microsoft has confirmed a fresh wave of layoffs at its Xbox gaming division, marking the third significant round of job cuts since its $69 billion acquisition of Activision Blizzard.

In a memo, Phil Spencer, CEO of Microsoft, has announced the decision, which impacts 650 roles primarily in corporate and support functions, is part of a broader restructuring effort aimed at aligning the gaming giant's post-acquisition structure for long-term success.

This development follows previous layoffs and studio closures within Microsoft's gaming sector as it strives to sustain its substantial investments in the industry.

Xbox layoffs: no games, studios will be canceled

This decision comes after earlier rounds of layoffs in January and May, where 1,900 jobs were cut, and several gaming studios were shut down, including Arkane Austin and Tango Gameworks.

The recent job cuts are part of a larger strategy by Microsoft to ensure the financial sustainability of its gaming division post-acquisition.

With the Activision Blizzard deal now complete, the company is focusing on restructuring its gaming operations to maintain its investment momentum.

Despite the reductions, Microsoft has confirmed that no games or studios will be canceled or closed as a direct result of these layoffs.

Major gaming companies cut jobs globally

The layoffs at Xbox are reflective of a wider trend in the gaming industry, where major firms like Sony, Unity, Twitch, Playtika, and Discord have all announced significant job cuts over the past two years.

Sony, for example, laid off 900 employees from its PlayStation unit in February 2024.

This industry-wide reduction in workforce highlights the challenges gaming companies face in managing costs while pursuing growth in a competitive market.

Microsoft's Xbox division has seen significant downsizing efforts over the past year.

In January, the company cut 1,900 jobs across its gaming sector, followed by the closure of several studios in May.

These actions were taken as part of Microsoft's broader strategy to integrate Activision Blizzard into its operations and optimize its gaming business for future success.

Despite the ongoing layoffs, Microsoft has reassured its gaming community that there will be no negative impact on the development or release of games, devices, or gaming experiences.

The company remains committed to supporting its remaining workforce and ensuring the long-term viability of its gaming division.

With the restructuring efforts underway, Microsoft aims to position Xbox for continued growth and success in the competitive gaming market.