Microsoft gaming's post-acquisition bloodletting continues as 650 more staff are set to be laid off for 'sustainable future growth'

Microsoft will soon, depending on when this latest round of layoffs are actioned, have let go over 2,500 total staff since purchasing Activision Blizzard for $69 billion.

An internal memo shared by IGN states that 650 workers across "mostly corporate and supporting functions" will be laid off. In an email sent to staff, head of Xbox Phil Spencer noted that the removals were "part of aligning our post-acquisition team structure and managing our business.

"I know that this is difficult news to hear," Spencer continues, "We are deeply grateful for the contributions of our colleagues who are learning they are impacted. In the US, we’re supporting them with exit packages that include severance, extended healthcare, and outplacement services to help with their transition; outside the US packages will differ according to location."

After stating that the cuts—again, 650 jobs' worth of them—somehow make Microsoft's "corporate and supporting teams and resources are aligned for sustainable future growth", Spencer specifically mentions that "no games, devices or experiences are being cancelled and no studios are being closed as part of these adjustments today."

Invoking sustainable growth after a $69 billion acquisition has a grim pang of irony to it, especially since said acquisition was followed by a shock of 1,900 layoffs across Xbox's gaming division in January, the closure of four studios including Arkane Austin and Tango Gameworks in May—the latter of which has been picked up by Krafton—and a Bloomberg report that stated more cuts were on the way, wherein Matt Booty likened the company's stretched-thin staff to "peanut butter on bread."

Spencer finished his memo with further platitudes: "I know that going through more changes like this is hard, but even in the most trying times, this team has been able to come together and show one another care and kindness as we work to continue delivering for our players. We appreciate your support as we navigate these changes and we thank you for your compassion and respect for each other."

It's a particularly grim time for the industry writ large. From January 2023 to January 2024, over 16,000 developers lost their jobs, a number that has only grown since. Restructuring, of course, isn't unheard of, especially after large acquisitions—sometimes you'll wind up with duplicate positions, particularly in central roles like the corporate and supporting ones mentioned here. Even if that's the case, it's an extra sting after the brutal beginning to the new Microsoft-owns-Blizzard world.

I just can't shake the feeling we're thoroughly in 'time is a flat circle' territory, here. In terms of the wider games industry, the slow disintegration of Embracer, both Concord and Suicide Squad bleeding money, large-scale acquisitions and optimistic live service ventures leading to a rush to trim the fat… I hope, and doubt, that these aftershocks will be the last out of Microsoft for a while.