Microsoft Cuts 650 Xbox Jobs Amid Restructuring Following Activision Blizzard Deal (Updated)

Editor’s Note: This story has been updated with a confirmation from Microsoft.

Microsoft (NASDAQ:MSFT) has reportedly laid off 650 employees in its gaming division, months after the company laid off 1,900 employees following its $68.7 billion acquisition of Activision Blizzard.

What Happened: The layoffs were announced by Xbox chief Phil Spencer in an internal memo, reported Bloomberg.

The cuts follow Microsoft’s recent $68.7 billion acquisition of Activision Blizzard and come months after the company laid off 1,900 employees in the same division. Spencer emphasized that no games, devices, or experiences are being canceled, and no studios are closing as part of these layoffs.

Will Beckett, Vice President, Assembly for Xbox, confirmed the news in an email to Benzinga.

MSFT did not immediately respond to Benzinga's request for comment.

"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," Spencer said in an internal memo, according to the report.

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Microsoft is offering exit packages, including severance, extended healthcare, and outplacement services to affected employees in the U.S., with varying packages for those outside the U.S.

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Why It Matters: The recent layoffs are part of a broader restructuring within Microsoft’s gaming division, which began earlier this year as part of Microsoft's strategy to integrate the new teams from Activision Blizzard and streamline operations. This move affected about 8% of its overall gaming workforce, which stands at approximately 22,000 employees.

In July, Microsoft executed another round of layoffs, impacting various teams and regions. Although the company did not disclose the exact number of employees affected, it was part of ongoing organizational adjustments.

The layoffs come on the heels of Microsoft’s acquisition of video game giant Activision Blizzard in October. This approval was secured after Microsoft agreed to sell Activision's game streaming rights to Ubisoft Entertainment.

Price Action: Microsoft's shares closed 2.2% up at $423.33 on Wednesday. In premarket trading on Thursday, the stock was marginally up by 0.04% at the time of writing, according to Benzinga Pro data.

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