Microsoft is reducing its gaming division workforce by approximately 650 employees, a move that follows earlier layoffs of 1,900 staff members from Activision Blizzard and Xbox, and the shutdown of several game studios, including Arkane Austin.
Phil Spencer, head of Xbox, communicated the layoffs in an internal memo this morning, as reported by The Verge. According to Spencer, the layoffs are part of adjustments related to the Activision Blizzard acquisition, but he assured that no games, devices, or experiences are being canceled, and no studios are closing as a result.
Spencer’s memo explains that the layoffs, which affect mainly corporate and support roles, are intended to align the post-acquisition team structure and set the stage for long-term success. The company completed its $68.7 billion acquisition of Activision Blizzard in October, following a prolonged regulatory review in the UK and US.
Here is the full text of Phil Spencer’s memo:
“In the past year, our objective has been to integrate new teams while minimizing disruption and enabling them to perform at their best. To align our post-acquisition team structure and manage our business effectively, we have decided to eliminate approximately 650 roles across Microsoft Gaming. These cuts primarily affect corporate and support functions and are intended to position our business for long-term success.
I understand this news is difficult. We are sincerely grateful for the efforts of our affected colleagues. In the US, we are providing exit packages that include severance, extended healthcare, and outplacement services to support their transition. Packages for employees outside the US will vary by location.
These changes are designed to ensure our corporate and support teams are better aligned for sustainable growth and can more effectively support our studio teams and business units. Although some teams will face shifts in priorities and adjustments to game lifecycle and performance management, no games, devices, or experiences are being canceled, and no studios are closing due to these changes.
We have faced both successes and challenges throughout our team’s history, and today is a particularly challenging day. Even during these tough times, I am confident in our team’s ability to come together and support one another. Your patience and understanding are appreciated as we navigate these transitions, and we thank you for your compassion and respect.”
Phil