The elimination of mostly corporate and support roles across Microsoft Gaming is intended to "organize our business for long-term success" in the aftermath of the $69 billion acquisition, unit chief Phil Spencer told employees in a memo viewed by AFP.
"Today is one of the challenging days," Spencer said in the memo. "I know that going through more changes like this is hard."
The Communications Workers of America (CWA) labor union, which includes members in the video game industry, called the layoffs "extremely disappointing," coming on the heels of Sony Interactive Entertainment subsidiary Bungie announcing 220 layoffs in July.
"Heartless layoffs like these have become all too common," World of Warcraft senior producer and CWA member Samuel Cooper said in a release by the labor organizers.
Microsoft in January said it was laying off 1,900 people, or eight percent of staff, from its gaming division as it consolidated the buyout of Activision Blizzard.
Spencer told employees at the time that Microsoft and Activision were committed to finding a "sustainable cost structure" to grow the gaming business, which employed 22,000 people and includes the Xbox division.
"Together, we've set priorities, identified areas of overlap, and ensured that we're all aligned on the best opportunities for growth," he added in a memo at the time.
Microsoft launched its takeover in January 2022, an acquisition that made it the world's third-largest gaming company by revenue.
No games or devices are being cancelled, nor are any studios being closed as part of the "adjustments" made at Microsoft's gaming unit on Thursday, according to Spencer.
Layoffs have become common in the video game industry, with Sony PlayStation early this year announcing it was laying off eight percent of its global workforce.
Calling it "sad news," PlayStation chief Jim Ryan said that the reduction would affect 900 people across the globe, including video game-making studios.
The company's PlayStation London studio, which was founded in 2002 and specialized in virtual reality gaming projects, was being closed in its entirety, the company said.
In all, last year the tech industry lost some 260,000 jobs according to layoffs.fyi, a California-based website that tracks the sector.
So far this year, layoffs are at 136,360, the site showed, from 435 tech companies.
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