Microsoft Cuts Gaming Jobs in Xbox Shake-Up

Microsoft has announced significant layoffs within its gaming division today, according to an internal memo from Xbox head Phil Spencer that was obtained by IGN.

A source familiar with the matter informed IGN that Candy Crush maker King was notably impacted, though the reductions extend across other segments of the gaming operation. IGN has learned that certain teams at Microsoft-owned Bethesda, including its London office, were also affected. Additionally, Rare's long-in-development Xbox title Everwild has been canceled as part of this restructuring.

The gaming job cuts are included in a far-reaching round of layoffs at Microsoft, which total roughly 9,100 positions, or 4% of its global workforce. Microsoft employs more than 228,000 people worldwide.

In his internal communication, Spencer did not provide specifics, stating to employees, "Any organizational changes will be communicated by your team leaders in the days ahead."

The following message from Phil Spencer was distributed to all gaming staff today:

Today we are sharing decisions that will impact colleagues across our organization. To position Gaming for long-term success and focus on key growth areas, we will discontinue or scale back work in certain parts of the business. We are also aligning with Microsoft's broader strategy by streamlining management structures to enhance agility and effectiveness. Out of respect for those affected today, the details regarding today’s notifications and any organizational realignments will be shared by your team leaders in the coming days.

I understand these changes are happening at a time when we have more players, more games, and more hours of gameplay than ever. Our platform, hardware, and pipeline of upcoming games have never been more robust. The success we are experiencing today stems from difficult choices we've made in the past. To ensure we thrive in the years ahead, we must make strategic decisions now. This means exercising discipline to concentrate on the most promising opportunities. We will safeguard what is working well and focus our resources on areas with the highest growth potential, all while meeting the company's performance expectations. This targeted approach enables us to deliver outstanding games and player experiences for years to come.

While focusing our efforts is crucial, it does not diminish the gravity of this announcement. Simply put, we would not be where we are today without the hard work, creativity, and dedication of those whose roles are being eliminated. These decisions are in no way a reflection of the talent, innovation, and commitment of the individuals involved. Our current momentum is no accident—it's the result of many years of dedicated work from our teams.

Our HR team is working directly with impacted employees to provide severance benefits, in accordance with local regulations, which include compensation, continued healthcare coverage, and career transition support. Employees whose positions have been eliminated are encouraged to consider open roles within Microsoft Gaming, where their applications will receive priority consideration.

Thank you to everyone who has helped shape our culture, our products, and our community. We move forward with a deep sense of gratitude and respect for all who have contributed to our journey.

Phil

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Microsoft employees who spoke anonymously to protect their positions told IGN that staff had been preparing for potential layoffs, bracing for difficult news.

Microsoft has undertaken multiple rounds of reductions in its gaming division since its $69 billion acquisition of Activision Blizzard. The company eliminated 1,900 jobs in January 2024, followed by further cuts just months later when it shuttered Redfall developer Arkane Austin and Hi-Fi Rush developer Tango Gameworks. In September 2024, Microsoft cut an additional 650 positions from its gaming business. Then, in May of this year, Microsoft reduced its workforce by a substantial 6,000 employees, representing about 3% of its total staff. Today's announcement marks the fourth round of layoffs to affect Microsoft's gaming division in the past 18 months.

In a June 2024 interview with IGN, Xbox chief Phil Spencer remarked: "I have a responsibility to operate a sustainable and growing business within the company. That sometimes requires making tough decisions—choices I personally don't enjoy, but which are necessary for the health of the organization."

These latest cuts follow Microsoft's recent confirmation of plans for next-generation Xbox consoles and its prominent presence at the gamescom exhibition.