Microsoft is ending the year as it began. Earlier this year, the Xbox maker announced it will cut nearly two thousand staff in its gaming division. It will yet again cut 650 roles in the gaming division. The company’s head of gaming Phil Spencer informed employees about the development through an email on Thursday, September 12, 2024.
Head of Xbox, Phil Spencer
The roles affected were mostly support functions and corporate and Spencer claimed the decision was made “to organize our business for long-term success”. He further clarified that no games, devices, or experiences would be affected by the decision and that no studio would be shuttered.
ALSO READ: Why Is My Gaming Laptop So Slow? 5 Ways To Fix It!
The recent layoff announcement means the company has cut over 2,500 roles in its gaming division since acquiring Activision Blizzard for nearly $70 billion in 2023. Spencer made it clear that the job cut was linked to that acquisition. Find the full text of Spencer’s letter below as spotted on Game File.
Subject: Changes to Microsoft Gaming
For the past year, our goal has been to minimize disruption while welcoming new teams and enabling them to do their best work. 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.
I know that this is difficult news to hear. We are deeply grateful for the contributions of our colleagues who are learning they are impacted. In the US, we’re supporting them with exit packages that include severance, extended healthcare, and outplacement services to help with their transition; outside the US packages will differ 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. 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. No games, devices or experiences are being cancelled and no studios are being closed as part of these adjustments today.
Throughout our team’s history, we have had great moments, and we have had challenging ones. Today is one of the challenging days. I know that going through more changes like this is hard, but even in the most trying times, this team has been able to come together and show one another care and kindness as we work to continue delivering for our players. We appreciate your support as we navigate these changes and we thank you for your compassion and respect for each other.
Phil
Microsoft has a strong lineup of games releasing this fall including Activision’s Call of Duty: Black Ops 6 and Indiana Jones and the Great Circle. Xbox has struggled with console sales. Consequently, the management now brings its first-party titles to rival consoles to boost sales.
The number of staff in the video game industry swelled during the pandemic era. With economies now shrinking, studios are realigning to the new reality. It is estimated that over 12,500 jobs have been lost in the industry this year, according to Video Game Layoffs.
