Summary
- Microsoft will lay off up to 9,000 employees across the company.
- Xbox CEO Phil Spencer sent a detailed internal memo to staff explaining the decision.
- Impacted employees will receive severance benefits and job placement support.
Phil Spencer confirms Xbox layoffs in internal staff memo
A new internal memo from Xbox CEO Phil Spencer has shed light on Microsoft’s latest round of layoffs, which could impact up to 9,000 employees globally. First reported by Variety and later published by IGN, this decision affects various parts of the company, including Microsoft’s billion-dollar gaming division.
According to the leaked memo, Spencer told employees that Microsoft Gaming will begin reducing or ending work in certain areas and follow the parent company’s strategy of flattening management layers to improve efficiency. These changes are part of what Spencer described as a focused approach to secure Xbox’s long-term success.
“We must make choices now for continued success in future years,” Spencer wrote. “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.”
Support for affected employees
Spencer reassured staff that HR teams are actively supporting those impacted. Severance packages will include pay, healthcare coverage, and job placement services. Employees who lost their roles are encouraged to apply for open positions within Microsoft Gaming, where they’ll receive priority review.
“These decisions are not a reflection of the talent, creativity, and dedication of the people involved,” Spencer added. “Our momentum is not accidental—it is the result of years of dedicated effort from our teams.”
While Spencer acknowledged the progress Xbox has made—citing stronger platforms, hardware, and a solid game roadmap—he emphasised that continued success depends on difficult decisions made today.
The internal memo ends with Spencer thanking everyone who helped shape the company’s products and culture, promising that Xbox will move forward with deep respect for all who contributed to its journey.
