Microsoft is reportedly axing 650 jobs in its Xbox games division — less than a year after closing its Activision deal

Microsoft laid off 1,900 workers in January. 

Microsoft is laying off 650 employees in its Xbox games division, Bloomberg reported.

The job cuts mostly affect workers in corporate and support functions, the report says, citing a memo sent by Microsoft Gaming chief Phil Spencer on Thursday.

According to Bloomberg, Spencer said in the internal memo sent to staff: “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.”

Spencer reportedly added that Microsoft is not closing any studios and has no plans to scrap games or devices.

Microsoft previously laid off 1,900 staff in January across the video game firm Activision Blizzard, Xbox, and its holding company ZeniMax.

Spencer said in a memo announcing the cuts at the time that Microsoft Gaming and Activision’s leadership was “committed to aligning on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business.”

The tech giant then shut down four game studios in May.

The latest wave of layoffs comes less than a year after antitrust regulators cleared Microsoft’s $69 billion deal to buy Activision Blizzard — the creator of video games “Call of Duty” and “World of Warcraft.”

The video games industry has experienced notable challenges in recent years, as B-17 wrote in February, including plummeting sales, a downward trend in usage, and mass layoffs.

According to a games industry layoffs tracker, more than 11,500 workers had already lost their jobs in 2024 — that’s over 1,000 more than the total for 2023.

Microsoft didn’t immediately respond to a request for comment from B-17, made outside normal working hours.