Microsoft’s gaming division has recently faced significant downsizing, with another wave of layoffs set to impact around 650 positions. These cuts primarily affect corporate and support roles, marking the latest chapter in the company’s ongoing restructuring efforts. In an email to staff, Xbox chief Phil Spencer explained that the goal over the past year has been to “minimize disruption” while integrating new teams and helping them thrive.
He emphasized that this decision aims to position the company for “long-term success.” Spencer reassured employees that no games, devices, or projects would be canceled, and no studios would be shuttered due to these adjustments. Earlier, Microsoft had already let go of 1,900 employees from its gaming sector, affecting teams from Xbox, ZeniMax, and Activision Blizzard.
The layoffs, a substantial reduction from the division’s 22,000 employees, are part of an overall strategy focused on achieving sustainable growth and maintaining a balanced cost structure. In May, Microsoft closed several Bethesda Softworks studios, including Arkane Austin, Tango Gameworks, and Alpha Dog Studios, as part of its broader reorganization efforts. A former employee later hinted that financial pressures and the need to meet revenue targets contributed to these closures.
Despite the challenges, Spencer expressed confidence in the team’s resilience, noting their ability to support one another and continue delivering for their players through these difficult times.