In an internal memo, Phil Spencer indicated that the layoffs were necessary due to shifting priorities and to manage the lifecycle and performance of games.
Despite the layoffs, Spencer reassured that Microsoft is not closing any studios and maintains no plans to cancel any games or devices.
The video game industry is currently facing challenges, including significant drops in sales and widespread layoffs, with over 11,500 jobs lost in 2024 alone.
These layoffs follow Microsoft’s prior job cuts of 1,900 employees in January and the closing of four game studios in May.
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