Microsoft will cut another 650 gaming jobs, mostly at Activision Blizzard

Second round of layoffs after the merger

Microsoft

Microsoft’s gaming chief Phil Spencer told employees in an email on September 12, 2024, that the company will lay off around 650 people from its video games division, as has been reported by Stephen Totilo, who gained access to the full memo announcing the bad news.

It’s the second round of cuts following Microsoft’s acquisition of Activision Blizzard after layoffs conducted in January 2024 already eliminated around 1,900 jobs. Whereas that wave of layoffs included top personnel such as former Blizzard president Mike Ybarra, no executives will leave the company this time around. According to Spencer’s memo, the brunt of these cuts will be borne by corporate and support roles.

He emphasized that “no games, devices or experiences are being cancelled and no studios are being closed” this time. In the previous wave of layoffs, at least one project at Blizzard bit the dust.

Microsoft has had to deal with declining hardware sales recently and its overall gaming revenue would have decreased in the last quarter compared to the previous year, had it not been for the addition of Activision Blizzard to its portfolio. Microsoft already increased the Xbox Game Pass prices to bring in more revenue, demanding a return on its investments into the gaming division after the hefty bill of the merger.

You can find the entire memo sent by Phil Spencer as posted by Totilo on Game File below:

“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 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.”