Microsoft Gaming Cuts Jobs Amid Restructuring

Microsoft has announced significant workforce reductions within its gaming division today, according to an internal memo from Xbox chief Phil Spencer obtained by IGN.

Multiple sources confirm the layoffs heavily impacted Candy Crush maker King, with additional cuts across Microsoft's broader gaming operations. Among affected teams are several Bethesda studios, including its UK-based London office. The restructuring also led to cancellation of Rare's long-developing Xbox exclusive Everwild.

Widespread Microsoft Restructuring

The gaming division reductions form part of Microsoft's company-wide layoffs eliminating approximately 9,100 positions (4% of total workforce) across its global operations spanning over 228,000 employees.

Spencer's memo avoided detailing specific cuts, stating: "Any organizational shifts will be shared by your team leaders in the coming days."

Full Statement from Phil Spencer:

Today we are implementing changes affecting colleagues throughout our organization. To position Gaming for sustainable success and focus on strategic priorities, we're scaling back certain business areas while streamlining management structures to enhance operational efficiency. We'll provide impacted teams with detailed announcements in coming days.

These decisions coincide with record engagement across our gaming ecosystem. Our current platform strength results from difficult choices we've previously made. Continuing this momentum requires disciplined prioritization - concentrating resources on highest-potential opportunities while meeting corporate expectations. This focused strategy ensures we can deliver exceptional player experiences for years to come.

While necessary for growth, these changes don't diminish our appreciation for affected employees' contributions. Our success stems directly from their talent and dedication. HR teams are providing comprehensive transition support including extended compensation, healthcare continuation, and preferential consideration for internal roles.

We move forward with profound gratitude for everyone who has shaped our gaming community.

Phil

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Ongoing Restructuring Trends

Anonymous Microsoft employees told IGN the latest cuts were anticipated following multiple prior restructuring waves.

Since finalizing its $69 billion Activision Blizzard acquisition, Microsoft has implemented four gaming division workforce reductions totaling thousands of positions:

• January 2024: 1,900 layoffs
• Studio closures including Arkane Austin and Tango Gameworks
• September 2024: 650 additional cuts
• May 2025: 6,000 reductions (3% of workforce)

The latest reductions arrive as Microsoft prepares next-generation Xbox hardware and maintains strong presence at gamescom. In June 2024, Spencer acknowledged the difficulty of such decisions, stating: "Running a sustainable business sometimes requires uncomfortable choices that nevertheless must be made."