Breaking News: Microsoft to Cut 650 Jobs from Gaming Division Post-Merger - What Investors Need to Know
In a bold move, Xbox owner Microsoft is set to slash about 650 jobs from its gaming division following its massive $69bn merger deal. The software giant revealed that the layoffs would primarily impact staff in corporate and supporting functions worldwide.
This latest round of job cuts comes after Microsoft laid off 1,900 employees in January and closed four studios in May, signaling a significant restructuring effort within the company. However, Xbox boss Phil Spencer reassured workers that no games, devices, or experiences would be canceled, and no studios would be shut down as a result of the layoffs.
Microsoft's acquisition of Activision-Blizzard last October, which also included Candy Crush maker King, has been a major focus for the company as it seeks to solidify its position in the gaming industry. Spencer emphasized that the job cuts were necessary to align the post-acquisition team structure for long-term success and growth.
The gaming industry as a whole has seen a wave of layoffs in recent years, driven by increased investments and acquisitions amid record profits and player numbers during the Covid-19 pandemic. While Microsoft's gaming revenues have seen an uptick, primarily due to its ownership of Activision-Blizzard, sales of Xbox hardware have declined, prompting the company to pivot towards expanding its software sales.
Overall, investors should monitor Microsoft's gaming division closely in the coming months to gauge the impact of these layoffs on the company's financial performance. With the gaming industry in a state of flux, it's crucial for investors to stay informed and adapt their strategies accordingly to navigate the ever-changing landscape.