Microsoft is set to cut 650 jobs within its Xbox unit, marking the third round of layoffs this year as the tech giant continues efforts to streamline costs and integrate its $69 billion acquisition of Activision Blizzard, according to a report by Bloomberg News on Thursday.
The gaming industry has witnessed significant turmoil in the first half of the year, with mass layoffs, studio closures, and project cancellations. These events have been driven by a sluggish recovery in gaming expenditure after a pandemic-driven peak in player engagement.
The latest job cuts will predominantly affect corporate and supporting roles within Xbox, according to a memo sent to staff by Xbox chief Phil Spencer, cited by Bloomberg. Despite the reductions, no games, devices, or experiences are being cancelled, and no studios are being closed as part of these adjustments, the memo clarified.
Microsoft and Xbox did not immediately respond to requests for comment by Reuters.
Last year, Microsoft closed its monumental acquisition deal with Activision Blizzard, bolstering its position in the video gaming industry. The deal brought under Microsoft’s wing hit franchises such as Call of Duty, positioning the company more competitively against industry leader Sony.
In January of this year, Microsoft announced it would lay off 1,900 employees at both Activision Blizzard and Xbox. In May, the company shuttered several gaming studios, including Arkane Austin.
The challenging environment for gaming companies has been reflected in broader industry trends. Last month, research firm Newzoo reduced its growth forecast for the global video game market, citing underperformance in console sales and a relatively light release schedule of new games this year.
