IT layoffs: Microsoft to let go 650 more in Xbox gaming division

Microsoft has announced its decision to lay off another 650 employees from its Xbox gaming division. With this, the total downsize count reaches 2,550 since the tech giant’s acquisition of the American video game company, Activision Blizzard, last year.

Microsoft has been making workplace changes ever since the purchase of Activision Blizzard last year, in a $69 billion deal. The latest firings come after a round of job cuts earlier this year that saw 1,900 employees being asked to leave the company.

The latest downsizing will primarily impact corporate and support jobs within the organisation. The step is essential because the Activision Blizzard purchase has led to organisational restructuring, said Microsoft Gaming CEO Phil Spencer in an official memo.

The possible impact on Microsoft employees in India is not known right away. Spencer said the company would support sacked employees in the United States “with exit packages that include severance, extended healthcare, and outplacement services to help with their transition” but added that for those fired “outside the U.S. packages will differ according to location”.

Microsoft’s gaming revenue has overall been on the rise after the Activision Blizzard acquisition but most of its Xbox business has struggled in recent years. With hardware sale figures recording a fall, Microsoft has lately released many of his new games on rival platform PlayStation to earn big money.

The streamlining process is expected to enable the organisation run its game studios and business more efficiently, Spencer claimed, adding that the thrust of the move was on ensuring long-term success.

The CEO in his memo specified that no games or gaming devices would be cancelled, and no gaming studio would be shut down as a fallout of the current decision.

Here is Phil Spencer’s complete memo:

“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 U.S., we’re supporting them with exit packages that include severance, extended healthcare, and outplacement services to help with their transition; outside the U.S. 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”

Currently, Microsoft is preparing to release several new games including Call of Duty: Black Ops 6 and new products such as the latest line of Xbox consoles.