Xbox lays off 650 more people, Spencer says no games cancelled

Microsoft is laying off a further 650 people from its gaming division, months after it laid off 1,900 Activision Blizzard and Xbox employees and shuttered several game studios, including Arkane Austin and Tango Gameworks. Microsoft’s gaming head Phil Spencer said no games were being cancelled and no studios would be closed as a result of the new round of cuts.

Spencer made the announcement on Thursday morning in an internal memo seen by The Verge. He said the cuts were mostly to “corporate and supporting functions” as the Xbox business continued to reorganize following Microsoft’s $68.7 billion acquisition of Activision Blizzard.

Here’s the full text of Spencer’s memo, as reported by The Verge:

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

Polygon has contacted Microsoft for comment.

These latest layoffs at Xbox will add to 2024’s grim tally of job cuts across the video game industry — which, at the year’s halfway point, had already exceeded the total number of jobs lost in 2023.