Microsoft to lay off about 650 employees in videogame division — WSJ
Microsoft plans to eliminate roughly 650 positions across its videogame business, according to a report by the Wall Street Journal. The cuts add to a multi-year wave of restructuring in the company’s gaming arm as it integrates recent acquisitions and refocuses its portfolio.
The Journal did not immediately specify which teams or regions would be affected. Microsoft’s gaming organization spans Xbox hardware and services, the ZeniMax/Bethesda group, and Activision Blizzard King, which the company acquired in 2023 for $69 billion.
The move follows significant headcount reductions in the sector over the past two years. Microsoft cut about 1,900 gaming roles in early 2024, months after closing the Activision Blizzard deal, and later shuttered or consolidated several studios as part of broader streamlining efforts. The company has said those actions were aimed at reducing overlap, prioritizing key franchises, and aligning investments with long-term growth areas.
The broader games industry has undergone a sharp reset since 2023, with publishers and platforms tightening spending after a pandemic-era surge cooled and development costs rose. Rival firms including Sony, Electronic Arts, Embracer Group, and others have also trimmed staff, pointing to a focus on fewer, larger releases and live-service titles with steadier revenue potential.
For Microsoft, the restructuring comes as it bets on a combined strategy of first-party blockbusters, multiplatform publishing where it makes sense, and subscription growth through Xbox Game Pass and cloud streaming. Integrating large content pipelines and toolchains from acquired studios has also prompted back-office changes and role consolidation.
It was not immediately clear whether the latest cuts would affect announced game roadmaps or release schedules. Microsoft has been positioning upcoming installments from Activision, Bethesda, and Xbox Game Studios as tentpoles for its ecosystem, while continuing to support ongoing franchises across console, PC, and mobile.
The company has previously emphasized that portfolio discipline and operating efficiency are priorities as it seeks sustainable margins in gaming. The WSJ report did not include details on severance or timing for the reductions.
Microsoft’s gaming division remains one of the company’s most consumer-facing businesses, and any further workforce changes will be closely watched by players, partners, and developers. The company has not issued an official statement on the reported cuts.
