Microsoft’s gaming division is undergoing another round of significant layoffs, with around 200 employees from Stockholm-based King studio, known for Candy Crush, being affected. This is just the first wave of what is expected to be a much larger downsizing, with more cuts anticipated across Microsoft’s gaming teams, including ZeniMax offices across Europe. This news comes after reports that Microsoft is preparing to lay off up to 9,000 people company-wide.
Phil Spencer, head of Microsoft’s gaming division, acknowledged the difficult decision in a memo to employees, stating the layoffs are part of a broader strategy to focus on the company’s most promising opportunities. 
Despite rising gaming numbers, Spencer explained that these decisions are essential for future success, emphasizing that Microsoft’s gaming platform, hardware, and game roadmap have never been stronger.
While the cuts are painful, Spencer highlighted that these decisions do not reflect the value or creativity of the impacted employees. He pointed to the success Microsoft has seen, which is the result of years of hard work from its teams. The layoffs come after the cancellation of Rare’s long-awaited title, Everwild, which had been in development for nearly a decade.
These layoffs are not the first for Microsoft’s gaming division. Previous rounds of cuts have included the shuttering of several ZeniMax studios, such as Tango Gameworks and Arkane Austin, and layoffs from Activision teams after Microsoft’s acquisition of Activision Blizzard. The current round of layoffs is expected to total around 2,000 employees, making up 10% of Microsoft’s gaming division workforce, which stands at 20,000 employees.
As the cuts continue, the gaming industry watches closely to see how these changes will affect the future of Microsoft’s gaming ambitions and its ability to compete with other major players in the market.