Microsoft's Xbox turbulence shows no signs of abating

In a week when Xbox fans were hoping for an answer from Microsoft on the PS5 Pro, the software giant is instead conducting a third round of layoffs in the gaming industry. 650 employees from Microsoft's gaming division are being let go as part of ongoing cuts at Xbox following Microsoft's $68.7 billion acquisition of Activision Blizzard.

Microsoft cut 1,900 jobs at Activision Blizzard and Xbox earlier this year and then closed four studios it acquired as part of its $7.5 billion acquisition of Bethesda in May. Fortunately, Hi-Fi noise Studio Tango Gameworks was finally saved from closure by Microsoft after Krafton, the South Korean publisher behind PUBG: Battlegrounds And The Callisto Protocolacquired the Japanese studio from Microsoft instead.

Xbox boss Phil Spencer announced the recent layoffs in an internal memo that was made available The edge, at 3 a.m. PT this morning. The cuts are part of the continued restructuring surrounding the Activision Blizzard deal, and “no games, devices or experiences are being canceled,” Spencer says. Unlike previous layoffs, no studios are being closed this time either. The 650 job cuts will primarily impact “corporate and support functions,” according to Spencer, meaning cuts to human resources and marketing functions.