Microsoft is laying off 650 workers from its Xbox division, aka 3% of its total gaming staff.
👉 Background: Microsoft is the tech giant founded almost 50 years ago by Bill Gates. It's known for its office products like the Microsoft 365 suite, or Windows. But it also has a massive gaming division which includes Xbox, and recently Activision Blizzard, the makers of Call of Duty.
👉 What happened: Xbox and Activision each have their own gaming divisions, and there seems to be a lot of crossover between the two. So now, Microsoft is laying off 650 workers from its Xbox division, aka 3% of its total gaming staff.
👉 What else: The idea is to align its post-acquisition team structure. But ultimately, that means cleaning up the rest of its gaming division to make room for its new entrant.
💡When a new tenant moves in, the house gets a makeover. After an acquisition, the merged companies work to maximise synergies. That can involve job cuts, merging departments, or closing underperforming parts of the business.
💡In Microsoft's case, job cuts have been a big part of achieving those synergies. This is the third time it has made redundancies since acquiring Activision Blizzard:
💡We also saw this when Disney acquired 21st Century Fox. Just days after the acquisition, Disney announced that it would lay off 3,000 staff. Now, we'll have to wait and see if this is the last of Microsoft’s gaming layoffs or if there’s more to come.
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