Microsoft toss another 650 jobs onto the layoff pyre in the name of “sustainable future growth”

Not enough Microsoft jobs have been splayed and flayed atop the Altar of Growth, so High Priest Spencer must once again perform the Rite of Strategic Repositioning. According to a leaked memo, Microsoft are laying off around 650 people “to organize our business for long term success”. This is the same Microsoft that parted with around 1900 employees in January, and the same Microsoft that washed their hands of around 10,000 staff in January 2023, all in the name of shoring up the business for future prosperity. That “long term success” is certainly taking its sweet time. Or at least, it is if you’re one of the poor saps in the trenches of, in this case, “corporate and supporting functions”.

As with the previous round of cuts, this latest bout of belt-tightening is the result of Microsoft needing to recover some of that money they spent inhaling Activision-Blizzard in 2023 – a $69 billion deal that has necessitated the departure of about 2,550 staff to date.

“For the past year, our goal has been to minimize disruption while welcoming new teams and enabling them to do their best work,” Xbox chief Phil Spencer explained to Microsoft employees in an internal memo, sent this week and obtained by IGN. “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.” US people let go will be supported “with exit packages that include severance, extended healthcare, and outplacement services to help with their transition” while the layoff terms will vary outside the US 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,” the memo continues. “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.” Spencer doesn’t specify which games have been “impacted”, but he does add that “no games, devices or experiences are being cancelled and no studios are being closed as part of these adjustments today.”

The Acti-Blizz merger appears to have done reasonably well for Microsoft as a whole. According to the company’s most recent quarterly results, gaming revenue was up 44% year-over-year, albeit with “48 points of net impact” from the acquisition. I don’t quite understand what a “point of net impact” is, and I’m not convinced anybody else reporting on this story does either. But the upshot is that Microsoft executives continue to feel the need to trim the books. Back in May, they announced the closures of Prey developers Arkane Austin and Hi-Fi Rush developers Tango Gameworks, though Tango and Hi-Fi Rush were rescued by Krafton in an 11th hour deal.

According to one unofficial tracker, there have been over 11,000 games industry layoffs in 2024 so far. If you’re one of the people affected by this week’s reductions, best of luck with it all.