Earlier this year, Microsoft joined the unfortunate trend of layoffs, first laying off 8% of its gaming division, and then most recently, shutting down multiple studios including Arkane Austin, Alpha Dog Studios, Roundhouse Games which was folded into ZeniMax Online Studios, and Tango Gameworks at the time. Since then, Tango Gameworks has been saved following its acquisition by Krafton alongside the Hi-Fi Rush IP. However, Microsoft revealed today that they are laying off 650 more employees from its gaming division.

BREAKING: Microsoft is laying off 650 employees from its gaming division today. Xbox chief Phil Spencer sent an internal memo to employees this morning to announce the layoffs. Details below 👇 https://t.co/NxqUsg5Lui

— Tom Warren (@tomwarren) September 12, 2024

Microsoft Gaming CEO Phil Spencer shared the news to employees with an internal memo. Spencer said the cuts are related to the Activision Blizzard deal but made it clear that “no games, devices, or experiences are being canceled” and there will be no studio closures as part of the layoffs today.

The full memo can be seen 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.”

Phil