Key facts
- Microsoft laid off approximately 500 employees on Tuesday.
- The majority of the layoffs occurred within the Xbox gaming division.
- A small number of roles were also cut in cloud + AI units.
- These cuts follow previous layoffs in July, which affected about 4,800 employees.
- Xbox plans to eliminate roughly 20% of its workforce by the end of Microsoft's fiscal year.
- Xbox executive Matt Booty stated that restructuring actions since July are about three-quarters complete.
Microsoft began a new round of layoffs on Tuesday, impacting around 500 employees, primarily within its Xbox gaming division, with a smaller number of roles affected in cloud and AI units. These cuts are part of a broader restructuring effort within Xbox following years of expansion and significant acquisitions.
In a memo to staff, Xbox executive Matt Booty detailed the changes, stating that the actions completed since July, including studio divestitures, have brought the company roughly three-quarters of the way through its previously announced restructuring. The latest developments include the elimination of 268 gaming roles across various first-party studios and management layers.
Xbox is also reorganizing its studios to strengthen franchises. Activision will expand its responsibilities to include World's Edge and Rare, and will lead development for the next Halo title with a new team. Bethesda will incorporate Obsidian, and King will merge with Microsoft Casual Games. Playground and Turn 10 studios will combine to focus on the Forza and Fable franchises.
Regarding studio divestitures, Compulsion, Double Fine, and Undead Labs have transitioned their intellectual property, back catalogs, and funding. However, two separate agreements for Ninja Theory fell through, leading to proposed closures and ongoing consultations. Consultation with Arkane also remains underway.
Microsoft's severance package for US employees laid off in July included up to 39 weeks of base pay, with additional time based on seniority and tenure.