Breaking News: Microsoft to Cut 650 Jobs in Gaming Division Post-Merger - What It Means for Your Investments
In a strategic move following its $69bn merger deal, Xbox owner Microsoft has announced plans to reduce its gaming division workforce by approximately 650 employees. This decision comes after previous layoffs earlier this year and the closure of four studios acquired before the Activision-Blizzard purchase.
Despite these job cuts, Xbox boss Phil Spencer reassured employees that no games, devices, or experiences will be impacted, and no studios will be shut down. Microsoft's acquisition of Activision-Blizzard in October expanded its gaming portfolio to include Candy Crush maker King and Zenimax, the parent company of Bethesda.
Spencer emphasized that these job reductions are part of aligning the post-acquisition team structure for long-term success and growth. While games and studios remain unaffected, other teams may experience some changes as they adapt to shifting priorities.
The gaming industry has seen a wave of layoffs in recent years despite record profits and player numbers during the pandemic. Companies like Sony, Riot Games, and Epic have also downsized their workforce. Microsoft has faced criticism for studio closures, but Spencer is committed to building a sustainable gaming business that demonstrates growth.
Microsoft's latest financial report reflects increased gaming revenues, primarily driven by the Activision-Blizzard acquisition. However, Xbox hardware sales have declined, prompting the company to focus on expanding software sales.
In conclusion, Microsoft's decision to cut jobs in its gaming division is a strategic move to position the company for long-term success and growth in the competitive gaming industry. Investors should monitor how these changes impact Microsoft's gaming revenues and market position moving forward.