Microsoft Cuts 650 Jobs in Gaming Division Restructuring

Microsoft is reducing its gaming workforce by approximately 650 positions, marking the latest wave of staff cuts following the company’s massive $68.7 billion acquisition of Activision Blizzard. The decision comes just eight months after a significant reduction that impacted 1,900 employees within the same division.

In an internal memo circulated to staff, Xbox head Phil Spencer explained that the layoffs are a strategic move to adjust the company’s organizational structure. These cuts primarily target corporate and support-oriented roles as the business seeks to align its post-acquisition operations for long-term stability.

Focus on Operational Efficiency

Spencer emphasized that the current round of workforce reductions is aimed at organizational optimization rather than a retreat from product development. According to the memo, the company’s current priorities remain intact:

• No video games, hardware devices, or user experiences are being canceled as a result of these changes.
• There are no plans to close any additional internal game studios at this time.

This approach stands in contrast to the company’s previous round of layoffs earlier this year, which resulted in the closure of several notable studios, including Arkane Austin and Tango Gameworks. At the time of this report, Microsoft has not provided further comment regarding the specifics of the transition or the timeline for the affected staff.

The memo, initially reported by IGN, underscores the ongoing integration challenges faced by the tech giant as it continues to consolidate its gaming assets under the Microsoft Gaming umbrella.