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Microsoft executive vice president Phil Spencer spoke at the company’s Xbox One X launch event ahead of the E3 Electronic Entertainment Expo in Los Angeles on June 11, 2017.
Patrick T. Fallon | Bloomberg | Getty Images
Microsoft The company said Thursday it would cut 650 jobs in its Xbox gaming division as part of the latest major job cuts to hit the video game industry.
This marks the third job cuts at Microsoft’s video games division since it acquired Activision Blizzard, the publisher of the “Call of Duty” series, for $69 billion in cash.
The US tech giant confirmed to CNBC that it was cutting hundreds of roles at Xbox, “primarily in corporate operations and support functions.”
Bloomberg News reported the incident early Thursday morning.
In a memo obtained by CNBC, Microsoft Gaming CEO Phil Spencer told employees that the company made the “difficult” decision to adjust its team structure following the acquisition and “organize our business for long-term success.”
“I am deeply grateful for the contributions of my colleagues who know they are being impacted,” Spencer said in the memo.
“In the US, we are supporting employees with severance packages that may include severance pay, extended health insurance and outplacement services. Packages outside the US vary by location.”
“There will also be some impact to other teams that manage the lifecycle and performance of our games as they adapt to changing priorities,” Microsoft’s gaming chief added.
He stressed that no games, devices or experiences will be canceled as a result of the cuts, and no studios will be closed.
Microsoft has been cutting costs at Xbox to make its big acquisition of Activision and broader investments in the games industry sustainable.
The company acquired ZeniMax Media, owner of Bethesda Softworks, for $7.5 billion in 2021. Bethesda publishes major game titles such as Fallout and the Elder Scrolls series.
Microsoft isn’t the only gaming giant cutting jobs, with major game studios cutting thousands of positions around the world between 2023 and 2024.
February, Japan Sony The company announced it would lay off 900 employees in its PlayStation division.
Gaming software company Unity, Amazon-owned livestreaming service Twitch, mobile game publisher Playtika and social platform Discord have also announced large-scale job cuts.
Still, the cuts have been particularly brutal at Xbox: Microsoft cut 1,900 jobs in its gaming division in January, just three months after completing its acquisition of Activision Blizzard.
The company announced in May that it would be closing several game studios, including Arkane Austin, Tango Gameworks and Alpha Dog. Several employees were also laid off as a result of the closures, but Microsoft has not disclosed how many jobs were affected by these actions.
Read the full note from Microsoft Gaming CEO Phil Spencer below.
Subject: Microsoft Game Modifications
Our goal over the past year has been to onboard our new teams and enable them to do their best work with minimal disruption. As part of aligning our team structure and managing the business post-acquisition, we have made the decision to eliminate approximately 650 positions across Microsoft Gaming – primarily in corporate and support functions – to position the business for long-term success.
We know this is bad news to hear, and we deeply appreciate the contributions of our impacted colleagues. In the US, we are supporting them with severance packages that include severance pay, extended health insurance, and outplacement services; packages outside the US vary by location.
These changes align our corporate and support teams and resources for sustainable future growth and allow us to better support our studio teams and business units with programs and resources that can scale with their needs. Separately, they impact other teams that manage the lifecycle and performance of our games, adapting to changing priorities as part of running our business. No games, devices or experiences are being canceled, and no studios are being closed, as part of today’s adjustments.
In the history of our team, there have been great moments and difficult moments. Today is one of those difficult days. I know it’s hard to go through so many changes, but even in the most difficult times, this team has been able to come together and continue to serve our players while showing compassion and kindness to one another. I thank you all for your support as we go through these changes and I appreciate the compassion and respect you have for one another.
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