In a new wave of job cuts, Microsoft has announced the layoff of 650 employees from its Xbox division, the second major workforce reduction this year in the gaming arm. The job cuts follow a previous workforce reduction of about 1,900 positions in January 2024. According to Microsoft, these layoffs are part of broader restructuring efforts aimed at streamlining its gaming operations, especially after the high-profile acquisition of Activision Blizzard.

News of the recent job cuts was communicated to employees via an internal memo from Microsoft gaming chief Phil Spencer. According to Spencer’s memo, the latest round of layoffs will primarily affect corporate and support roles within Microsoft’s gaming division. Spencer assured employees that no games, devices, or experiences are being canceled as a result of these layoffs, and no studios will be closed.

“Our goal over the past year has been to minimize disruption while welcoming new teams and enabling them to do their best work,” Spencer said in the memo. He also stressed the company’s commitment to long-term success, saying, “With these changes, our corporate 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,” Spencer said in the internal memo, as reported by The Verge.

According to the memo, the latest job cuts at Microsoft will affect employees in the United States and internationally. For affected employees in the US, Microsoft is offering exit packages that include severance pay, extended healthcare benefits and outplacement services to aid in the transition to new employment. Packages for employees outside the US will vary based on regional guidelines and policies.

Spencer also noted that these layoffs will help Microsoft’s corporate and support teams better align with studio teams and business units. “Now our teams will be better supported with programs and resources that can scale to meet their needs,” Spencer wrote.

Layoffs at Microsoft in 2024

Notably, the latest round of layoffs adds to the larger workforce reductions that took place in January 2024. During that period, Microsoft laid off nearly 1,900 employees, including high-profile individuals like Mike Ybarra. The layoffs in January follow Microsoft’s $68.7 billion acquisition of Activision Blizzard, one of the biggest deals in gaming history.

Since acquiring Activision Blizzard, Microsoft has focused on minimizing disruption while integrating new teams into its structure. According to Microsoft, the reorganization is intended to help Microsoft Gaming’s corporate and support teams better align with the needs of studio teams and business units.