Massive layoffs at Microsoft Gaming: Around 9,000 employees, or 4% of the total workforce, are being let go, affecting Xbox, King (200 staff), Zenimax, and resulting in the reported cancellation of Rare’s project Everwild.
Strategic restructuring: The cuts are part of a broader move to refocus on high-potential areas and streamline operations by removing management layers for greater agility.
Internal messaging from Phil Spencer: In a heartfelt letter, Spencer recognized the contributions of affected staff, emphasized ongoing platform growth, and promised severance benefits and priority review for new roles.
Microsoft has confirmed that it is laying off roughly 9,000 employees, or around 4% of its total workforce, in this latest round of business cuts that also affect Xbox.
Microsoft Layoffs Details
According to a Bloomberg Report by Jason Schreier, Candy Crush developer King will lay off about 200 employees, or 10% of its staff. European offices such as Zenimax will also face cuts.
According to a report from VGC, Rare’s long-time project, Everwild, has been cancelled due to this latest round of layoffs.
Microsoft Gaming CEO Phil Spencer has sent a letter to staff today, recognizing the talents affected. In his note, he points out that these changes “come at a time when we have more players, games, and gaming hours than ever before,” and that “The success we’re seeing currently is based on tough decisions we’ve made previously.”
You can view the full letter below:
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.
