Microsoft Lays Off Around 650 Employees from Xbox Gaming Unit

Microsoft announced this Thursday that it will cut off around 650 roles from its Xbox gaming division. According to CNBC, the CEO of Microsoft Gaming, Phil Spencer, sent a memo to employees informing them about the decision this week.

“We are deeply grateful for the contributions of our colleagues who are learning they are impacted,” said Spencer in the document CNBC verified.

According to the information shared by the CEO, most of the roles being cut out are from supporting and corporate positions. It was also clarified that no devices, games, studios, or gaming experiences would be affected by this change. In previous layoffs, studios have been affected, but not this time.

This would be the third round of layoffs since the acquisition of Activision Blizzard for $69 billion in October last year. This new cut was focused on reducing redundancies, aligning the new merged team, and focusing on long-term goals.

“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,” said Spencer.

According to the BBC, this new layoff represents 3% of the gaming staff. Spencer mentioned that he knew it would be “difficult” for many workers and acknowledged and thanked their contribution to Xbox.

After the pandemic, the gaming industry has faced multiple layoffs including companies like Sony’s Playstation. However, while Xbox device sales have fallen, according to recent reports, Microsoft has mentioned that gaming revenues have increased, especially after the purchase of Activision-Blizzard—which produces popular games like Overwatch, World of Warcraft, and Diablo.

A few months ago, Microsoft also announced higher prices for its Xbox Game Pass subscription services.

Other tech companies also announced layoffs this week. Bending Spoons announced on Monday that it will cut 75% of WeTransfer’s staff.