Microsoft has confirmed a new round of layoffs, impacting as many as 9,100 employees, or approximately 4 percent of its total workforce, as reported by The Seattle Times. The cuts are significantly affecting Microsoft’s Xbox division, known as Microsoft Gaming, though precise numbers for individual teams are not yet available.
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Phil Spencer, head of Xbox, addressed his team in a memo, stating, “To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness.”
The layoffs extend across various gaming studios under Microsoft. King, the Microsoft-owned division responsible for Candy Crush, is cutting around 10 percent of its workforce, totalling 200 employees, according to Bloomberg. Other units, including ZeniMax, have also confirmed job reductions.
Furthermore, Microsoft is laying off over 70 individuals at Turn 10, the studio behind Forza Motorsport. The cuts also include the cancellation of two anticipated titles, Perfect Dark and Everwild. As a result, The Initiative, the studio developing Perfect Dark, will be closing down.
These substantial layoffs follow a series of reductions at Microsoft throughout the year. Less than two months ago, the company announced cuts impacting over 6,000 employees, followed by an additional 305 job reductions in early June. Microsoft employees have faced consistent layoffs over the past year, including performance-based cuts that have reportedly had a significant negative impact on morale.
Previous major layoffs include 1,900 Activision Blizzard and Xbox employees in January 2024, followed by several game studio closures and job losses in May. Additionally, 1,000 positions were eliminated from its HoloLens and Azure cloud teams in June. In September, 650 more Xbox employees were laid off as part of a restructuring related to the Activision Blizzard acquisition.
This is the memo that Xbox boss Phil Spencer sent to employees:
Today we are sharing decisions that will impact colleagues across our organization. To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organizational shifts will be shared by your team leaders in the coming days.
I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger. The success we’re seeing currently is based on tough decisions we’ve made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities. We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come.
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Prioritizing our opportunities is essential, but that does not lessen the significance of this moment. Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted. These decisions are not a reflection of the talent, creativity, and dedication of the people involved. Our momentum is not accidental—it is the result of years of dedicated effort from our teams.
HR is working directly with impacted employees to provide severance plan benefits (aligned with local laws), including pay, healthcare coverage, and job placement resources to support their transition. Employees whose roles were eliminated are encouraged to explore open positions across Microsoft Gaming, where their applications will be given priority review.
Thank you to everyone who has shaped our culture, our products, and our community. We will move forward with deep appreciation and respect for all who have contributed to this journey.
Phil
