Microsoft will lay off about 650 people from its gaming division, largely in "corporate and support functions," according to an email from Xbox head Phil Spencer sent to staff today. Game File reports that most of the cuts will impact people at Activision Blizzard.
Spencer called the cuts "part of aligning our post-acquisition team structure and managing our business" according to his note, published by Game File and other outlets. That acquisition was also cited when Microsoft laid off 1,900 gaming employees back in January, which also largely affected Activision Blizzard. Both these cuts come following Microsoft's nearly $69 billion purchase of Activision Blizzard in October, and as Activision Blizzard continues to bolster Microsoft's gaming revenue.
Spencer wrote that "No games, devices or experiences are being cancelled and no studios are being closed as part of these adjustments today." This mention is apparently necessary given Microsoft's closure of four Bethesda studios back in May. At that time, Bloomberg reported that there would be more Xbox cuts to come.
"Throughout our team’s history, we have had great moments, and we have had challenging ones. Today is one of the challenging days," wrote Spencer, who is probably having a "challenging" day but is not losing his job, despite the fact that he's laid off 2,550 people since the acquisition.
Following this year's layoffs and closures, Microsoft has seen an increase in unionization, with workers at Bethesda Game Studios, on World of Warcraft, and in Blizzard QA unionizing with the Communications Workers of America. While Microsoft signed a labor neutrality agreement with the CWA in 2022, workers at Raven Software filed a complaint with the National Labor Relations Board last month, accusing the company of bad faith bargaining.
Update 7:15pm--The CWA released a statement on the layoffs, writing in part, "Microsoft’s decision to lay off 650 video game workers is an extremely disappointing move from one of the world’s largest and most profitable corporations... While none of those who are losing their jobs are represented by CWA, we understand how devastating layoffs are to the workers and their families."
WoW senior producer Samuel Cooper, a member of the WoW Guild, is quoted as saying, "While we would hope that a company like Microsoft with $88 billion in profits last year could achieve ‘long-term success’ without destroying the livelihoods of 650 of our colleagues, heartless layoffs like these have become all too common. We stand in solidarity with everyone who lost their job today and encourage all video game workers to join with us and form unions so we can protect each other."
