Microsoft Announces Global Workforce Reductions, Including Gaming Division

Microsoft will lay off thousands of employees worldwide on Wednesday, including some in the Microsoft Gaming/Xbox division. The total number of staff affected is reported to be under 4% of Microsoft’s global workforce, which is approximately 228,000 employees.

A Microsoft spokesperson stated on Wednesday:

We continue to implement organizational and workforce changes that are necessary to position the company and teams for success in a dynamic marketplace.

Phil Spencer, Microsoft Gaming chief, sent a memo to staff on Wednesday morning:

To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organizational shifts will be shared by your team leaders in the coming days.

Further details regarding the layoffs and the specific divisions affected are expected to be provided later on Wednesday. Sources indicate that the cuts in the gaming division do not represent the majority of the layoffs.

Below is the full memo from Phil Spencer to staff:

Today we are sharing decisions that will impact colleagues across our organization. To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organizational shifts will be shared by your team leaders in the coming days.

These changes are being made at a time when the company is experiencing growth in players, games, and gaming hours. The current success is attributed to decisions made previously. The company states that choices are being made now to support continued success in future years, with a strategy focused on prioritizing the strongest opportunities. Efforts will be concentrated on areas with the greatest potential, while meeting company expectations for the business. This approach is intended to support the delivery of games and experiences for players in the future.

The company acknowledges the significance of these changes for employees whose roles are impacted. The decisions are not a reflection of the talent, creativity, or dedication of those involved. The progress achieved is the result of years of work by the teams.

Human Resources is working with affected employees to provide severance benefits in accordance with local laws, including pay, healthcare coverage, and job placement resources. Employees whose roles are eliminated are encouraged to apply for open positions within Microsoft Gaming, where their applications will receive priority review.

The company expresses appreciation for all employees who have contributed to its culture, products, and community.