Phil Spencer, Microsoft's top executive, has announced that the company will cut 650 jobs at its Xbox gaming unit.

• Microsoft Gaming CEO Phil Spencer announced in a memo that the company had made the "challenging" decision to lay off 650 employees at its Xbox division.
• Microsoft is streamlining its post-acquisition team structure after purchasing Activision Blizzard for $69 billion.
• Spencer expressed gratitude for the contributions of colleagues who learned they were affected in a memo sent to employees on Thursday.

On Thursday, Microsoft announced that it was cutting 650 roles at its Xbox gaming division, marking the latest major round of layoffs in the video game industry.

Since Microsoft's acquisition of Activision Blizzard for $69 billion in cash, the company's video game unit has experienced its third series of redundancies.

Microsoft, a leading US technology company, has announced to CNBC that it will be laying off hundreds of employees at Xbox, primarily in corporate and support roles.

Bloomberg News reported the development earlier on Thursday.

Microsoft Gaming CEO Phil Spencer informed employees in a memo that the company had made a "difficult" decision to restructure its post-acquisition team to ensure long-term success.

"Our colleagues who are learning they are impacted are deeply appreciated for their contributions, as stated by Spencer in the memo," said Spencer.

"In the US, we offer exit packages that include severance, extended healthcare, and outplacement services to assist with their transition. However, packages outside the US will vary based on location."

Microsoft's gaming chief stated that there would be "some effects on other teams as they adjust to changing priorities and oversee the development and maintenance of games."

No games, devices, or gaming experiences are being cancelled, and no studios are being closed due to the redundancies.

To ensure the sustainability of its acquisition of Activision and its gaming investment, Microsoft has been reducing expenses at Xbox.

In 2021, ZeniMax Media, the publisher of major gaming titles like Fallout and The Elder Scrolls series, was acquired by the company for $7.5 billion.

Gaming studios worldwide have been cutting thousands of jobs since 2023, with Microsoft being just one of the gaming titans doing so.

In February, Japan's PlayStation unit announced it was laying off 900 workers.

Substantial rounds of layoffs have been announced by gaming software firm Unity, Amazon-owned livestreaming service Twitch, mobile game publisher Playtika, and social platform Discord.

Microsoft's gaming division experienced particularly severe redundancies, with 1,900 job cuts in January, three months after acquiring Activision Blizzard.

In May, Microsoft announced the closure of several gaming studios, including Arkane Austin, Tango Gameworks, and Alpha Dog, resulting in layoffs for some employees. The company has not disclosed the exact number of jobs affected by these measures.

Microsoft Gaming CEO Phil Spencer has announced that the company will be investing heavily in cloud gaming technology.