Microsoft to cut 650 support jobs in Xbox Games unit: Report

According to memo sent to staff by Xbox chief Phil Spencer, the job cuts will affect mostly corporate and supporting functions, the report said

Tech giant Microsoft has said that it will be cutting 650 jobs in its Xbox unit, which is the third such layoff this year. According to a report published in Bloomberg News the latest round of job cut is an attempt by the company to rein in costs and integrate its $69 billion acquisition of Activision Blizzard

According to the memo sent to staff by Xbox chief Phil Spencer, the job cuts will affect mostly corporate and supporting functions, the report said. Microsoft in January it would let go of 1,900 employees at Activision Blizzard and Xbox.

Microsoft closed its $69 billion deal for Activision Blizzard on October last year, swelling its heft in the video-gaming market with best-selling titles including “Call of Duty” to better compete with industry leader Sony.

Activision makes popular mobile titles including “Candy Crush Saga” and “Call of Duty Mobile” – games that were excluded from the cloud streaming deal Microsoft signed with France’s Ubisoft Entertainment to secure approval from Britain.

Here is what Xbox chief Phil Spencer wrote in an internal memo as reported by Bloomberg News:

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 US, we’re supporting them with exit packages that include severance, extended healthcare, and outplacement services to help with their transition; outside the US 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.

Phil

*With inputs from Blommberg