Microsoft's Layoffs Impact Xbox Gaming Division

Microsoft Confirms Layoffs in Xbox Gaming

Microsoft has announced the termination of approximately 650 positions within its gaming division, Xbox. This decision was communicated by Xbox head Phil Spencer in an internal memo, as reported by The Verge. The layoffs are primarily affecting corporate and supporting roles, part of a restructuring plan after the company's acquisition of Activision Blizzard.

Reasons for the Restructuring

In his memo, Spencer stated, 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. This move follows Microsoft's $68.7 billion acquisition of Activision Blizzard, which faced extensive regulatory scrutiny in both the UK and US.

Employee Support Measures

• Spencer acknowledged the difficulty of the news and expressed gratitude for the contributions made by those affected.
• In the US, Microsoft is providing exit packages that include severance pay, healthcare benefits, and outplacement services.
• Support packages for employees outside of the US may vary based on location.

Focus on Future Growth

Spencer further clarified that these changes are aimed at aligning corporate and supporting teams for sustainable future growth. He emphasized that no games, devices, or experiences are being canceled and no studios are being closed as part of these adjustments. This assurance is significant, especially after several game studios were shut down following Microsoft's acquisition of Activision Blizzard.

Overall, the layoffs reflect ongoing challenges in the gaming industry, which has seen over 22,250 employees lose their jobs between January 2023 and June 2024, according to Statista.