Microsoft has announced the dismissal of 650 staff members from its Xbox division, making up the third set of layoffs within the gaming unit since its acquisition of Activision Blizzard.
The company is working to streamline its operations following the $69 billion deal, which brought the company well-known gaming titles such as ‘Call of Duty’.
The latest round of job cuts will primarily impact corporate and supporting roles within the Xbox division. In a memo to staff, Microsoft Gaming’s CEO, Phil Spencer, acknowledged the challenges of making such decisions but emphasised the need to reorganise the business to ensure long-term success.
While these redundancies represent a big change, Spencer assured that no gaming projects, devices, or studios would be affected by cancellations or closures.
Spencer also confirmed that employees affected by the cuts in the United States would receive severance packages, healthcare extensions, and outplacement services, while those in other countries would be supported according to local labour laws.
He reiterated that the restructuring is intended to align the company’s resources more efficiently to support growth in its gaming business.
The gaming sector has experienced huge job losses globally, with major companies like Sony and Unity also announcing cuts.
Microsoft’s latest layoffs follow earlier ones in January when the company let go of 1,900 employees. In May, the company closed several studios, including Arkane Austin and Tango Gameworks, though it did not disclose the exact number of employees affected at that time.
The video game industry has been hit with challenges in recent years, worsened by a downturn in player spending post-pandemic. Research firms have even reduced their growth forecasts for the sector, due to underwhelming console sales and fewer major game releases this year.
