Microsoft lays off 650 employees in games division amid post-acquisition restructuring

Microsoft has announced the layoff of 650 employees within its games division. The latest round of cuts follows earlier staff reductions and is part of a larger strategy aimed at aligning its workforce following recent acquisitions. The decision, attributed to Xbox chief Phil Spencer, comes as the company continues to restructure its business to secure long-term growth.

Phil Spencer addressed the layoffs in a memo to employees, explaining that the redundancies primarily affect Microsoft’s corporate and support teams. Spencer emphasized that no game projects, devices, or studios are being closed as a result of these changes. Instead, the restructuring is focused on organizing the company’s post-acquisition workforce to better support its various business units.

In his statement, Spencer said, “As we continue the process of aligning our post-acquisition team structure and organizing our business for long-term success, some corporate and supporting teams will be impacted as they adapt to shifting priorities.” He also highlighted that these changes are intended to create a more sustainable structure for future growth, ensuring that teams have the necessary resources to scale efficiently.

This latest wave of layoffs follows Microsoft’s earlier decision to cut 1,900 jobs from its games division earlier this year. The company also announced the closure of four Bethesda studios, including Tango Gameworks and Arkane Austin, as part of its ongoing efforts to streamline operations.

In recent months, Tango Gameworks, known for its “Hi-Fi Rush” intellectual property, was sold to Krafton as part of a strategic agreement. These changes come in the wake of Microsoft’s landmark $68.7 billion acquisition of Activision Blizzard in October 2023. The acquisition faced significant regulatory scrutiny in the UK, EU, and the US before eventually receiving approval.

The company has positioned these layoffs as a necessary step to ensure long-term success in the increasingly competitive gaming landscape. As Microsoft continues to integrate its acquisitions and adjust its business strategy, more shifts in its workforce structure are likely to occur.