by Black Ops 6
Xbox, a company in trouble, had more bad news to share with its employees today. In January 2024, the company laid off 1,900 Xbox and Activision-Blizzard employees, but now it’s laying off another 650. That’s 3% more than its total workforce.
Xbox head Phil Spencer announced the cuts, again citing the company’s “post-acquisition” era. Here’s his full memo to staff:
“Over the past year, our goal has been to minimize disruption while welcoming new teams and enabling them to do their best work. As part of aligning our post-acquisition team structure and managing our business, we have made the decision to eliminate approximately 650 roles within Microsoft Gaming — primarily corporate and support functions — to organize our business for long-term success.
I know this is difficult news to hear. We are deeply grateful for the contributions of our colleagues who are learning they have been impacted. In the U.S., we are supporting them with exit packages that include severance pay, comprehensive healthcare, and outplacement services to help with their transition; outside the U.S., packages vary by location.
With these changes, our business and support teams and resources are aligned for sustainable future growth and can better support our studio teams and business units with programs and resources that can scale to meet their needs. Additionally, as part of running the business, there are some impacts to other teams as they adapt to changing priorities and manage the lifecycle and performance of games. No games, devices, or experiences are being canceled, and no studios are being closed as part of these adjustments today.
Throughout our team’s history, we’ve had great moments, but we’ve also had challenging ones. Today is one of those challenging days. I know it’s hard to go through more of these changes, but even in the most difficult times, this team has been able to come together and show each other care and kindness as we work to continue delivering for our players. We appreciate your support as we navigate these changes, and we thank you for your compassion and respect for one another.”
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The exact nature of where these cuts have occurred is still unclear, but more information will undoubtedly emerge as the day progresses. The last time this happened was earlier this year, when the FTC filed a letter complaining that “this newly disclosed information contradicts Microsoft’s statements in this proceeding” regarding their previous protests of the acquisition deal. We’ll see if this new round of layoffs gets things moving again.
There are two problems here, the first is that large-scale layoffs are often a part of large-scale mergers like this, and that accounts for at least some of what’s on display here. But there are plenty of other problems with Xbox right now that it may need to “restructure” to address. A poor console performance this generation, a squeezing of Xbox Game Pass subscriber growth, a new first-party gaming philosophy that’s shipping some of its biggest titles to PlayStation. There’s a lot going on.
It is extremely sad for the hundreds, now thousands of employees who have been affected by this over a two-year period, at a time when mass layoffs are more common than ever in the video game industry.
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