Microsoft to lay off 650 support employees in Xbox Games unit

Microsoft Corp. is laying off 650 employees in its Xbox unit, reported the news agency Bloomberg on Thursday, September 12. This is the company's third such job cut this year as Microsoft is trying to control its costs and integrate its $69 billion acquisition of Activision Blizzard Inc., said the report.

“We have made the decision to eliminate approximately 650 roles across Microsoft Gaming—mostly corporate and supporting functions—to organize our business for long-term success,” said Xbox chief executive officer, Phil Spencer, in a memo sent to staff on Thursday, as per the agency report.

The jobs affected by this layoff will be “mostly corporate and supporting functions,” said the Xbox Chief, quoted in the agency report.

“No games, devices or experiences are being cancelled and no studios are being closed as part of these adjustments today,” said Spencer, quoted the agency report.

Xbox's employees had been preparing for further job reductions after Microsoft cut 1,900 jobs, many from Activision units and studios in January, as per the report. The company announced the closure of four studios acquired as a part of its $7.5 billion purchase of ZeniMax, one of the four was later sold instead, as per the report.

These steps, along with the decision to release some Xbox games on the competitor's consoles, have angered some of the platform's fans and have left them questioning the brand's commitment to build exclusive content, as per the report.

It has been a tough year for the games industry as the game development costs rise with subtle growth. Sony Group Corp., Take-Two Interactive Software Inc. and Electronic Arts Inc. are among the global companies to have laid off people and shut down marquee projects, said the report.

According to the report, Sony axed its big-budget multiplayer shooter Concord this month, only two weeks after its release, showing little patience for a game that got off to a slow start.

The global giant Microsoft completed the acquisition of Activision in October, 21 months after it was announced and after a huge battle of antitrust clearance. The purchase gave Xbox an infusion of new talent and content, as well as the challenge of making the deal work in the long run, said the report.

“With these changes, our corporate and supporting teams and resources are aligned for sustainable future growth, and can better support our studio teams and business units with programs and resources that can scale to meet their needs,” said Spencer addressing the future view of the company's growth, according to the report.