Microsoft is laying off a further 650 staff from its gaming business, according to a memo sent by Xbox chief Phil Spencer to staff today, September 12, and obtained by IGN.In the memo, Spencer said the roles affect mostly corporate and support functions, and were made “to organize our business for long term success.” He clarified that no games, devices or experiences are being canceled and no studios are being closed as part of these cuts.These latest layoffs mean Microsoft has let go of 2,550 staff from its gaming business since acquiring Activision Blizzard for $69 billion in 2023. In his memo, below, Spencer makes it clear that the cuts are related to the acquisition.Xbox boss Phil Spencer speaking at gamescom 2024. Image credit: Microsoft.Phil Spencer’s email to staff is reproduced in full below:For 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 across Microsoft Gaming — mostly corporate and supporting functions — to organize our business for long term success.I know that this is difficult news to hear. We are deeply grateful for the contributions of our colleagues who are learning they are impacted. In the U.S., we’re supporting them with exit packages that include severance, extended healthcare, and outplacement services to help with their transition; outside the U.S. packages will differ according to location.With these changes, our corporate and supporting 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. Separately, as part of running the business, there are some impacts to other teams as they adapt to shifting priorities and manage the lifecycle and performance of games. No games, devices or experiences are being cancelled and no studios are being closed as part of these adjustments today.Throughout our team’s history, we have had great moments, and we have had challenging ones. Today is one of the challenging days. I know that going through more changes like this is hard, but even in the most trying times, this team has been able to come together and show one another 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 each other.PhilThese cuts follow the already eye-watering 1,900 layoffs Microsoft made to its gaming business earlier this year, and continue the video game industry's torrid time of late. Microsoft closed Hi-Fi Rush developer Tango Gameworks and Redfall developer Arkane Austin as part of those cuts. PUBG publisher Krafton later picked up Tango Gameworks, saving around 50 of the 100 staff.Speaking to IGN in June, Spencer said: "I have to run a sustainable business inside the company and grow, and that means sometimes I have to make hard decisions that frankly are not decisions I love, but decisions that somebody needs to go make."
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