Tom Warren, a senior editor and author of Notepad with over two decades of experience covering Microsoft and tech, reports that Microsoft has confirmed plans to lay off up to 9,100 employees — about 4% of its global workforce — according to The Seattle Times. The cuts are hitting the Xbox division (Microsoft Gaming) particularly hard, though the full breakdown across teams hasn’t been disclosed yet.
In a note to staff, Xbox head Phil Spencer said the company is scaling back or ending work in certain areas to focus on long-term growth and improve efficiency by flattening layers of management.
According to Bloomberg, Microsoft-owned King, the maker of Candy Crush, is cutting roughly 10% of its workforce, or around 200 jobs. Other studios like ZeniMax have also confirmed layoffs. Additionally, more than 70 roles are being cut at Turn 10, the studio behind Forza Motorsport. Microsoft has also cancelled its Perfect Dark and Everwild games, and as part of the restructuring, The Initiative, the studio developing Perfect Dark, is being shut down.
These major job cuts come shortly after Microsoft announced over 6,000 layoffs less than two months ago, followed by another 305 job reductions in early June. Over the past year, Microsoft employees have endured repeated waves of layoffs, including performance-based cuts that have significantly affected morale, according to several current staff members.
Back in January 2024, Microsoft let go of 1,900 employees from Activision Blizzard and Xbox. This was followed by further studio closures and job losses in May, as well as 1,000 more layoffs in June affecting the HoloLens and Azure cloud teams. In September, Microsoft laid off another 650 Xbox staff as part of a broader restructuring tied to its acquisition of Activision Blizzard.
Here’s an excerpt from the memo Xbox chief Phil Spencer sent to employees:
“Today, we’re making decisions that will affect colleagues across the company. To ensure long-term success in Gaming and focus on strategic areas of growth, we’re scaling back or ending some work streams and following Microsoft’s broader plan to reduce management layers for improved agility and efficiency. Out of respect for those impacted, specific details will be shared by team leaders over the next few days.
I understand these changes come at a time when we’re seeing strong momentum — more players, games, and gaming hours than ever. Our platform, hardware, and future game plans are in a great place. The success we see now is the result of tough choices made earlier. To maintain that success in the years ahead, we must continue to focus on our most promising opportunities. This means supporting what’s working well and channeling efforts toward areas with the highest potential, all while meeting company expectations.
While focus is important, it doesn’t make this any easier. Those impacted have played a vital role in our achievements through their dedication, creativity, and hard work. Our progress didn’t happen by chance — it came from years of effort by our teams.
HR is working closely with affected employees to offer severance packages in line with local regulations, including continued pay, healthcare support, and job placement assistance. We encourage those impacted to explore new roles within Microsoft Gaming, where their applications will be prioritized.
Thank you to everyone who has helped build our culture, products, and player community. We move forward with gratitude and deep respect for all you’ve contributed.”
