Microsoft Cuts Hundreds Of Gaming Staff

Microsoft Gaming CEO confirms more bad news for employees with another round of painful layoffs for back-end corporate staff.

In an email, Microsoft Gaming CEO Phil Spencer confirmed that a further 650 staff would be cut from across the organisation, admitting “this is difficult news to hear,” Windows Central reported.

It comes after it announced in June that Microsoft’s Xbox chief marketing officer Jerret West was to leave the company to become the chief marketing officer at Roblox.

Gaming layoffs

It should be remembered that Redmond’s gaming division has been undergoing significant restructuring in 2024 after Microsoft completed its protracted $75 billion (£59bn) acquisition of Activision Blizzard in November 2023, and amidst broader spending weakness in the industry.

In January Microsoft cut 9 percent of the gaming division staff, or about 1,900 workers.

With this week’s 650 job losses (which equates to 3 percent of all staff) Microsoft has eliminated more than 2,550 gaming roles so far in 2024.

Now in his email to staff (see below) Phil Spencer emphasised that no studios are being closed and no devices are being cancelled. Spencer elaborated that the redundancies will fall “mostly” in corporate teams and their supporting functions, namely things like HR, finance, and marketing.

Some media reports however have indicated that Microsoft has reduced the “Call of Duty: Warzone Mobile” team, which included a combination of layoffs and transfers to other projects.

Phil Spencer email

“For the past year, our goal has been to minimise 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 organise 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 US, we’re supporting them with exit packages that include severance, extended healthcare, and outplacement services to help with their transition; outside the US 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”

Post Activision

Microsoft Gaming was created with the announcement of Redmond’s plans to acquire Activision Blizzard to unify all of Microsoft’s gaming groups within a single division.

But the division faces challenges as Xbox hardware sales continue to decline year-over-year. However as a division, Xbox is making more money than ever thanks to a number of big name gaming brands such as World of Warcraft, and the gaming juggernaut that is Call of Duty.

The acquisition of Activision Blizzard was always going to result in internal restructuring and job losses at Microsoft.

In May, Microsoft closed down three studios namely Arkane Austin, Alpha Dog Studios and Tango Gameworks, run by its subsidiary Bethesda Softworks.

Microsoft also reportedly merged a fourth studio called Roundhouse Games with its “The Elder Scrolls Online” team under ZeniMax Online Studios.