REDMOND, USA — Microsoft has announced plans to cut 650 jobs in its Xbox division. This marks the third wave of layoffs this year as the company looks to curb costs and streamline its operations following the $69 billion acquisition of Activision Blizzard.
According to a report from Bloomberg News on Thursday, September 12, 2024, the layoffs are expected to impact mostly corporate and support functions, as outlined in an internal memo sent by Xbox chief Phil Spencer to staff.
Spencer emphasized that no games, devices, or studios would be affected by the cuts, noting that “no experiences are being canceled” as part of these adjustments.
While Microsoft and Xbox have not yet issued a public comment, the tech giant’s ongoing job cuts align with broader trends across the video gaming industry.
This year has seen widespread layoffs, studio shutdowns, and project cancellations, as gaming companies grapple with reduced consumer spending.
Player engagement surged during the pandemic but has since leveled off, leaving many gaming companies facing a slow recovery in revenue.
In January, Microsoft announced it would eliminate 1,900 positions at both Activision Blizzard and Xbox.
The most recent cuts are another step in integrating the Activision Blizzard acquisition, which added popular gaming franchises such as Call of Duty to Microsoft’s portfolio in a move to better compete with industry leader Sony.
Earlier this year, Xbox shuttered several gaming studios, including Arkane Austin, further underscoring the difficult landscape the gaming industry faces.
A reduced number of major game releases and underperforming console sales have contributed to these struggles.
Newzoo, a prominent market research firm, recently scaled back its forecast for global video game market growth, citing a relatively light release schedule for console games this year.
As Microsoft continues to navigate these challenges, the company’s efforts to cut costs appear to reflect a broader strategy to optimize its gaming division in a volatile market.
While layoffs have hit hard across the industry, Microsoft’s focus on preserving its core gaming experiences may signal its intent to weather the current downturn and remain competitive in the long term.
