Microsoft plans to lay off about 650 employees from its gaming division following the completion of its $69 billion acquisition of Activision Blizzard, according to a report from BBC. The cuts represent roughly 3% of the company’s games workforce and will focus mainly on corporate and support roles worldwide.
The move follows earlier reductions: Microsoft cut 1,900 roles in January and closed four studios that had been acquired before the Activision Blizzard transaction. Company leadership said the latest wave of layoffs is part of a broader reorganization tied to the recent acquisitions and shifting priorities.
Assurance from Xbox leadership
In a memo shared online, Phil Spencer, head of Xbox, stated that no games, devices or studios will be canceled as a result of the layoffs. Spencer said the reductions are intended to realign the team with new priorities and the performance of the company’s games.
Why the reshuffle followed the Activision Blizzard deal
The acquisition of Activision Blizzard — which includes King, creator of Candy Crush, and the previously acquired ZeniMax, owner of Bethesda — prompted Microsoft to adjust its organizational structure. Company officials described the changes as necessary to ensure long-term success after integrating multiple large studios and franchises.
Industry-wide cost pressures and past criticisms
- The broader games industry has experienced waves of layoffs after heavy pandemic-era investments and acquisitions.
- Other major companies such as Sony, Riot Games and Epic have also announced significant cuts.
- Microsoft has faced criticism for closing well-known studios, including Arkane Austin and Tango Gameworks, amid prior restructuring.
Despite reductions in Xbox hardware sales, Microsoft’s games revenue has grown following the Activision Blizzard acquisition. The company is expanding its software offerings and has a slate of upcoming titles, including Call of Duty: Black Ops 6.
Pricing and platform strategy controversies
Microsoft has encountered criticism for raising the price of its Game Pass subscription and for plans to release some games on rival consoles, moves that drew scrutiny from parts of the gaming community and industry observers.
