Microsoft Is Laying Off 650 More Xbox Employees, Again Due To The Activision-Blizzard Deal

A beleaguered Xbox had more bad news to share with its employees today, that after the company laid of 1,900 Xbox and Activision-Blizzard workers in January 2024, it’s now adding 650 layoffs to those, an additional 3% of its workforce.

Head of Xbox Phil Spencer announced the cuts, again citing the “post-acquisition” era of the company. Here is his full memo to staff:

“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

The exact nature of where these cuts have happened is as-of-yet unclear, but more information will no doubt be trickling out over the course of the day. The last time this happened earlier this year, the FTC filed a letter complaining that “this newly-revealed information contradicts Microsoft’s representations in this proceeding” relating to their previous protestations of the acquisition deal. We’ll see if this new round of layoffs resparks things with them.

There are two issues here, the first being that large-scale layoffs are frequently a portion of large-scale mergers like this, and that’s responsible for at least part of seeing here. But there are plenty of other issues with Xbox right now that may need “restructuring” to address. A poor console showing this generation, a limit on growth of Xbox Game Pass subscribers, a new first party game philosophy that is shipping out some of its biggest titles to PlayStation. There’s a lot going on.

It is deeply unfortunate for the hundreds, now thousands of workers caught up in this in a two-year stretch where mass video game industry layoffs are more than common.

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