Microsoft to Cut 650 Jobs in Gaming Division After $69bn Merger
In a move that has sent shockwaves through the gaming industry, Xbox owner Microsoft has announced plans to cut about 650 staff from its gaming division following its $69bn (£54.3bn) merger deal. This comes after the software giant laid off 1,900 staff in January and closed four studios in May.
The latest round of job losses will primarily affect staff working in “mostly corporate and supporting functions” worldwide. However, Xbox boss Phil Spencer assured employees that no games, devices, or experiences would be canceled, and no studios would be closed as a result of the layoffs.
Microsoft’s purchase of Activision-Blizzard in October, which also included Candy Crush maker King and Zenimax, has led to the restructuring of the gaming division. Mr. Spencer stated that the decision to cut jobs was made to align the post-acquisition team structure and organize the business for long-term success.
Despite the layoffs, Mr. Spencer emphasized that the company’s focus remains on delivering quality games and experiences to players. He acknowledged that the news would be difficult for affected employees and thanked them for their contributions to the company.
The gaming industry has seen a wave of mass layoffs in recent years, with companies like Sony, Riot Games, and Epic Games also cutting hundreds of jobs. Microsoft has faced criticism for the closures of studios like Arkane Austin and Tango Gameworks earlier this year.
While Microsoft’s gaming revenues have increased, driven by its ownership of Activision-Blizzard, sales of Xbox hardware have declined. The company is now looking to expand its software sales to maintain growth in the competitive gaming market.
Overall, the gaming industry is facing challenges as companies navigate the changing landscape of gaming and strive to meet the demands of players in an ever-evolving market.
