Microsoft gaming unit to cut about 650 jobs, WSJ reports
The reductions follow Microsoft’s $75 billion Activision Blizzard deal and earlier cuts in its videogame operations this year.
By Amanda Ross · Deals Correspondent
· 2 min read
Microsoft Corp. is cutting about 650 positions in its videogame business, the Wall Street Journal reported Thursday, citing an internal email from Phil Spencer, chief executive of Microsoft Gaming. The reductions add to a series of cost-cutting measures at the unit after Microsoft completed its $75 billion acquisition of Activision Blizzard last year.
According to the Wall Street Journal, Spencer told employees in the email that the company would not close any studios as part of the move. He also said no game, device or experience would be canceled, the Journal reported.
The reported cuts mark another step in Microsoft’s integration of Activision Blizzard, one of the largest transactions in the history of the gaming industry. Such acquisitions can create overlap across corporate functions, publishing operations, technology teams and management layers, prompting companies to reduce roles as they combine businesses. The Journal report did not specify which teams or geographies would be affected.
Microsoft had already reduced headcount in the gaming division by about 1,900 employees at the start of the year, according to MarketWatch. In May, the company closed three studios, MarketWatch reported.
The gaming industry has been working through a slower demand environment since 2022, according to MarketWatch. The sector benefited during the pandemic from stay-at-home mandates, which lifted engagement and spending across parts of the market. Demand later cooled, and MarketWatch said the recovery since then has been modest.
For Microsoft, the gaming division is a strategic consumer business anchored by Xbox hardware, subscription services, game publishing and the Activision Blizzard portfolio. The company’s purchase of Activision Blizzard brought franchises and development teams into Microsoft’s broader gaming operation, increasing the scale of the business while also raising integration costs and organizational complexity.
Microsoft shares were little changed in premarket trading, according to MarketWatch. The stock has risen 12.5% so far this year, while the S&P 500 has advanced 16.4%, MarketWatch reported.
The company’s share performance places the reported gaming cuts within a broader investor focus on cost discipline across large technology companies. The reported email’s assurance that no studios or products would be eliminated indicates the reductions are aimed at staffing levels rather than a retreat from announced gaming projects, based on the Wall Street Journal’s account.
This story draws on original reporting from MarketWatch.
