Microsoft is making even greater cuts to the workforce at its Xbox gaming division.
The company announced plans on Thursday to lay off 650 employees, bringing the total number of jobs lost since its acquisition of Activision-Blizzard in October 2023 to 2,550.
The latest round of cuts will primarily affect corporate and support functions. No studios will be closed and no games or game systems will be discontinued as a result of the cost-cutting measures. (Microsoft has sold Tango Gameworks (maker of Hi-Fi noise) And Red Case developer Arkane Austin in previous rounds of layoffs, affecting its upcoming titles.)
“Throughout our team’s history, there have been great moments and challenging ones,” Microsoft Gaming CEO Phil Spencer wrote in an email announcing the cuts. “Today is one of those challenging days. I know it’s hard to go through more changes like this, but even in the most difficult of times, this team has been able to come together and show care and kindness to one another as we work to continue to serve our players. We appreciate your support as we navigate these changes and thank you for your compassion and respect for one another.”
Given the number of people affected and the company’s prominent position, Microsoft’s layoffs were among the most spectacular. But Microsoft is far from the only game maker currently struggling. The entire industry is in crisis after consumer interest surged during the pandemic.
More than 11,500 people in the video game industry lost their jobs in 2024. That’s more than in the whole of 2023 (10,500) and 2022 (8,500).
Sales of Microsoft’s Xbox fell sharply in its latest fiscal quarter, even though Microsoft spent the past year focusing less on gaming hardware and more on its game streaming service, GamePass. The company raised prices for it in July and announced in February that the service had 34 million subscribers.
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