Microsoft Cuts Jobs in Gaming Unit, Xbox Chief Says

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

Insiders revealed that Candy Crush studio King experienced substantial impacts, though the restructuring affects broader gaming operations. Sources indicate Microsoft-owned Bethesda, including its London branch, faced cuts, while Rare's long-gestating project Everwild was discontinued amid these changes.

These gaming division reductions form part of Microsoft's broader workforce restructuring, eliminating approximately 9,100 positions (4% of its global workforce). The company currently employs over 228,000 people worldwide.

Spencer's memo avoided specific details, stating: "Leadership teams will communicate organizational changes in coming days."

The following message was distributed company-wide today:

We're implementing organizational changes that affect teams across our gaming division. To ensure sustainable growth, we're streamlining operations and aligning with Microsoft's management restructuring to enhance agility. Out of respect for affected colleagues, specific details will be provided through appropriate channels in coming days.

These difficult decisions coincide with unprecedented engagement across our gaming ecosystem. Our hardware pipeline and content roadmap remain robust - successes built on past strategic choices. Future-focused prioritization now will sustain long-term success, allowing us to concentrate resources on high-potential opportunities while meeting business objectives. This discipline ensures our ability to deliver outstanding gaming experiences for years to come.

While strategic focus drives these changes, we deeply value every contribution. These workforce changes reflect operational necessities, not individual performance. Our current market position results from collective efforts across all teams, and we're grateful for every contribution.

Impacted employees will receive comprehensive transition support including severance packages, continued healthcare coverage, and prioritized consideration for other roles within Microsoft Gaming.

We express sincere appreciation to all who've shaped our culture and products. We move forward with profound respect for everyone's contributions on this journey.

Phil

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Anonymous Microsoft employees revealed to IGN that workforce reductions were anticipated, creating apprehension among staff.

Following its $69 billion Activision Blizzard acquisition, Microsoft has implemented multiple restructuring rounds - eliminating 1,900 positions in January 2024, shuttering Arkane Austin and Tango Gameworks months later, cutting 650 more positions in September 2024, and removing 6,000 roles (3% of its workforce) in May. Today's announcement marks the fourth major reduction in Microsoft's gaming division within eighteen months.

Speaking with IGN last June, Spencer acknowledged: "Operating a sustainable business requires difficult decisions - not always popular, but necessary for growth."

These workforce changes coincide with Microsoft confirming next-generation Xbox development and preparing for a strong gamescom presence.