Microsoft has today made significant layoffs to its gaming division, per a memo sent to staff by Xbox boss Phil Spencer and reviewed by IGN.
A source told IGN that Candy Crush developer King was hit hard, but the layoffs affect other parts of the gaming business. IGN understands parts of Microsoft-owned Bethesda, including its London office, were also affected by the cuts. Rare's long-in-development Xbox game Everwild was canceled as part of the round of layoffs.
The gaming layoffs come as part of an eye-watering round of cuts across Microsoft that amount to 4%, or roughly 9,100 of employees, losing their jobs. Microsoft has over 228,000 employees worldwide.
In the memo, Spencer failed to confirm specifics, telling staff “any organizational shifts will be shared by your team leaders in the coming days.”
The following message from Phil Spencer was shared to all gaming staff today:
Today we are sharing decisions that will impact colleagues across our organization. To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organizational shifts will be shared by your team leaders in the coming days.
I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger. The success we're seeing currently is based on tough decisions we've made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities. We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come.
Prioritizing our opportunities is essential, but that does not lessen the significance of this moment. Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted. These decisions are not a reflection of the talent, creativity, and dedication of the people involved. Our momentum is not accidental — it is the result of years of dedicated effort from our teams.
HR is working directly with impacted employees to provide severance plan benefits (aligned with local laws), including pay, healthcare coverage, and job placement resources to support their transition. Employees whose roles were eliminated are encouraged to explore open positions across Microsoft Gaming, where their applications will be given priority review.
Thank you to everyone who has shaped our culture, our products, and our community. We will move forward with deep appreciation and respect for all who have contributed to this journey.
Phil
Microsoft staff who wish to remain anonymous to protect their careers told IGN that employees had braced themselves for the layoffs, fearing the worst.
Microsoft has made a huge number of cuts to its gaming business since acquiring Activision Blizzard for $69 billion. It laid off 1,900 staff in January 2024, then made further cuts just a few months later when it closed Redfall developer Arkane Austin and Hi-Fi Rush developer Tango Gameworks. In September 2024, Microsoft cut a further 650 staff from its gaming business. And in May this year, Microsoft cut an eye-watering 6,000 staff, or 3% of its entire workforce. Today's round of layoffs is the fourth to hit Microsoft's gaming business in 18 months.
Speaking to IGN in June 2024, Xbox boss Phil Spencer said: "I have to run a sustainable business inside the company and grow, and that means sometimes I have to make hard decisions that frankly are not decisions I love, but decisions that somebody needs to go make."
The cuts come hot on the heels of Microsoft's confirmation that it plans to release next-gen Xbox consoles, and has a strong presence at video game show gamescom.
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.
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