Microsoft has announced it is cutting 650 jobs in its Xbox division, marking the third round of layoffs this year. These cuts come as the company works to manage costs following its $69 billion acquisition of Activision Blizzard, Bloomberg News reported on Thursday.
The gaming industry has faced widespread layoffs, studio closures, and project cancellations this year, as spending by gamers has struggled to recover after peaking during the pandemic. According to a memo from Xbox chief Phil Spencer, the job cuts will primarily affect corporate and support functions.
However, no games, devices, or experiences are being canceled, and no studios will close as part of these cost-saving measures. Microsoft’s representatives, including those at Xbox, did not immediately respond to requests for further comment from Reuters.
The acquisition of Activision Blizzard, completed last year, has bolstered Microsoft’s position in the gaming market with blockbuster franchises like “Call of Duty,” positioning it to better compete with Sony, the market leader. In January, Microsoft had already announced layoffs of 1,900 employees at Activision Blizzard and Xbox.
Earlier this year, Xbox also shut down several gaming studios, including Arkane Austin. Meanwhile, research firm Newzoo has recently lowered its growth forecast for the global video game market, citing weaker-than-expected console sales and a lighter game release schedule in 2023.
