Microsoft is downsizing its Xbox unit by laying off 650 employees, marking the third round of layoffs this year. The move is part of the company’s efforts to manage expenses and integrate its $69 billion acquisition of Activision Blizzard.
The job cuts will mainly affect corporate and supporting roles within Microsoft Gaming, with no plans to cancel games, devices, or experiences, and no studio closures at this time. This decision follows earlier layoffs in January, when around 1,900 roles were eliminated, many from Activision units and studios. The company also shut down several studios it acquired through its $7.5 billion purchase of ZeniMax, although one was later sold.
Microsoft’s acquisition of Activision in October 2023, after nearly two years of regulatory scrutiny, has brought new talent and content to Xbox. However, it has also presented the challenge of integrating these new assets into the company’s operations effectively.
The recent job cuts are viewed as a move to streamline its corporate and supporting team, ensuring better positioning for long-term growth and providing scalable support to its studio teams and business units in the future.
The layoffs occur at a challenging time for the gaming industry, which is grappling with rising development costs and limited growth. Other major companies in the sector, such as Sony, Take-Two Interactive, and Electronic Arts, have also reduced jobs and canceled projects.
