Microsoft Executive Vice President Phil Spencer speaks during the company’s Xbox One X launch event ahead of the E3 Electronic Entertainment Expo in Los Angeles on June 11, 2017.
Patrick T. Fallon Bloomberg | Getty Images
Microsoft It said on Thursday it would cut 650 jobs at its Xbox gaming division, the latest round of large-scale layoffs targeting the video game industry.
This is the third round of layoffs in Microsoft’s video game division since Microsoft’s $69 billion cash acquisition of Activision Blizzard (the publisher of the “Call of Duty” series of games).
The US tech giant confirmed to CNBC that it is cutting hundreds of Xbox jobs “primarily in corporate and support functions.”
Bloomberg News reported the development earlier Thursday.
In a memo obtained by CNBC, Microsoft Gaming Chief Phil Spencer told employees that the company made the “difficult” decision to restructure the post-acquisition team and “organize our business for long-term success.”
“We are deeply grateful for the contributions of our colleagues who understand they have been impacted,” Spencer said in the memo.
“In the U.S., we offer them exit packages including severance, extended health care and outplacement services to help them transition; outside the U.S., options will vary based on location.”
Microsoft’s gaming chief added that “there will be some impact on other teams as they adapt to the change in priorities and manage the lifecycle and performance of the game.”
He emphasized that no games, devices or gaming experiences have been canceled, and no studios have closed due to layoffs.
Microsoft has been cutting Xbox costs to make its massive acquisition of Activision Blizzard and its broader investment in gaming sustainable.
The company previously acquired Bethesda Softworks owner ZeniMax Media in 2021 for $7.5 billion.
Microsoft isn’t the only gaming giant to cut staff. Starting in 2023 and continuing into 2024, major game studios around the world have laid off thousands of employees.
February, Japan sony Announced that 900 employees in the PlayStation division will be laid off.
Game software company Unity, Amazon’s live streaming service Twitch, mobile game publisher Playtika and social platform Discord also announced large-scale layoffs.
Still, the cuts at Xbox have been particularly brutal. In January, just three months after completing its acquisition of Activision Blizzard, Microsoft cut 1,900 jobs in its gaming division.
In May, the company announced that it would be closing several game studios, including Arkane Austin, Tango Gameworks, and Alpha Dog. Several employees were also laid off as part of the shutdown, although Microsoft has not revealed how many jobs are affected by the measures.
You can read the full memo from Microsoft Gaming CEO Phil Spencer below:
Topic: Changes to Microsoft Games
Over the past year, our goal has been to minimize disruption while welcoming new teams and empowering them to do their best work. As part of our efforts to restructure our team and manage the business post-acquisition, we have decided to eliminate approximately 650 positions within Microsoft Gaming (primarily corporate and support functions) to organize our business for long-term success.
I know this is hard news to hear. We are grateful for the contributions of colleagues who learned they were affected. In the U.S., we provide them with separation packages that include severance, extended health care, and outplacement services to help with their transition; packages outside the U.S. will vary based on location.
Through these changes, our corporate and support teams and resources are positioned for sustainable future growth and can better support our studio teams and business units with scalable programs and resources to meet their needs. . Additionally, other teams will be impacted as they adapt to changing priorities and manage the lifecycle and performance of the game as part of business operations. As part of these adjustments today, no games, devices, or experiences have been canceled, and no studios have closed.
Throughout our team’s history, we have experienced great moments and challenging moments. Today is one of those challenging days. I know it’s difficult to go through more changes like this, but even in the toughest of times, this team has been able to come together and show care and kindness to each other as we strive to continue to serve our players. . We appreciate your support as we navigate these changes and appreciate your compassion and respect for each other.
Phil
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