Microsoft is laying off another 650 employees from its Xbox gaming division, the company announced in an overnight companywide memo. Microsoft Gaming CEO Phil Spencer stressed that no new games were being cancelled or studio closed as a result of the latest round of cuts.
The executive wrote in the memo, the full text of which was reported on by Game File, IGN, and others, that the layoffs were part of the ongoing integration with Activision Blizzard, the publisher of Call of Duty and other massive franchises, which Microsoft acquired for $69 billion last October after a lengthy regulatory fight. The 650 roles cut are “mostly corporate and supporting functions,” according to Spencer.
“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,” the executive, who has overseen a years-long acquisition spree of game studio sand publishers, wrote. “No games, devices or experiences are being cancelled and no studios are being closed as part of these adjustments today.”
That’s in contrast to the 1,900 layoffs announced at the beginning of the year which saw deep cuts to game development staff across various studios, including the cancellation of an unannounced fantasy survival crafting game at Blizzard. Then in May, Microsoft revealed that Hi-Fi Rush maker Tango Gameworks and Prey maker Arkane Austin, as well as two other teams under the Bethesda umbrella, would be shuttered. Tango Gameworks was recently resurrected by South Korean game publisher Krafton.
There has reportedly been increased pressure on the Xbox division within Microsoft to be more profitable following the long and costly acquisition of Activision Blizzard, which is set to release Call of Duty: Black Ops 6 next month. “We run a business,” Spencer said in an interview last month. “It’s definitely true inside of Microsoft the bar is high for us in terms of the delivery we have to give back to the company, because we get a level of support from the company that’s just amazing and what we’re able to go do.”