Microsoft has announced yet another round of layoffs following its acquisition of Activision Blizzard amid its current heavy investments in AI. A cush job offering at Microsoft could be a risky venture for anyone these days, as the company continues job cuts and more could easily be on the horizon. The console manufacturer and game/OS publisher reportedly has 228,000 staff worldwide, but according to multiple reports, has laid off nearly 27,000 since 2023. While the current amount is said to be 9,000, it follows another 6,000 in 2025 alone and then 1,900 in 2024, with 10,000 in 2023. Washington state seems to be a focal point of recent layoffs, as the Seattle Times has reported that roughly a third of the job cuts have happened there.
It’s been reported that Microsoft is currently investing big in creating its own AI infrastructure with having already spent $55 billion in FY24 and planning to increase that figure to over $80 billion for FY25. Meanwhile, it has already thrown out $69 billion for its purchase of Activision Blizzard in 2022. It’s reduced software engineering staff by nearly half, with 800 cut out of 1,985 positions. Microsoft’s gaming division has been particularly hit hard as well, with many studio closures and game development cancellations over the last two years. Xbox CEO Phil Spencer sent the following to staff regarding the latest round of staff reductions and reorganization.
Per Phil Spencer (via IGN):
“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.
I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger. The success we’re seeing currently is based on tough decisions we’ve made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities. We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come.
Prioritizing our opportunities is essential, but that does not lessen the significance of this moment. Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted. These decisions are not a reflection of the talent, creativity, and dedication of the people involved. Our momentum is not accidental — it is the result of years of dedicated effort from our teams.
HR is working directly with impacted employees to provide severance plan benefits (aligned with local laws), including pay, healthcare coverage, and job placement resources to support their transition. Employees whose roles were eliminated are encouraged to explore open positions across Microsoft Gaming, where their applications will be given priority review.
Thank you to everyone who has shaped our culture, our products, and our community. We will move forward with deep appreciation and respect for all who have contributed to this journey.
Phil”
While the Xbox CEO acknowledges the recent successes of its gaming division, it’s likely to be of little consolation for the many who have, or will become, jobless. From new titles to cross-platform releases on PlayStation, the Xbox gaming division has been riding high since before the start of 2025, but rumors about the CEO’s retirement began circulating after yesterday’s layoff announcement, stating that he would step down following the launch of the next Xbox console. Xbox has been prominent with its own recent announcements regarding its partnership renewal with AMD for its consoles, but also working with hardware manufacturers to bring its Xbox OS to the gaming handheld market as well. Microsoft was quick to state, per The Verge, that there are no plans for Phil to retire anytime soon, but that vague claim doesn’t really deny the rumors either, since the next Xbox isn’t expected until at least 2027.