Microsoft is reducing its workforce by 650 employees within its Xbox unit, according to a recent report. This move marks the third round of layoffs by the company this year as it aims to manage expenses and integrate its $69 billion acquisition of Activision Blizzard.
The layoffs will primarily impact corporate and supporting roles within Microsoft Gaming, with no cancellations of games, devices, or experiences, and no studio closures planned at this time.
The decision follows earlier job cuts in January, which saw around 1,900 roles eliminated, many of them from Activision units and studios. The company also closed several studios acquired through its $7.5 billion purchase of ZeniMax, although one of these studios was later sold.
Microsoft’s acquisition of Activision, finalised in October 2023,after nearly two years of regulatory scrutiny, has brought new talent and content to Xbox. However, it has also introduced the challenge of effectively integrating these new assets into the company’s operations.
This recent round of job cuts is seen as an effort to streamline its corporate and supporting team. Additionally, it’s to ensure better positioning for long-term growth and to provide scalable support to its studio teams and business units in the future.
The layoffs come at a challenging time for the gaming industry, which is facing rising development costs and limited growth. Other major companies in the sector, such as Sony, Take-Two Interactive and Electronic Arts, have also cut jobs and cancelled projects.
