Microsoft layoffs strike Candy Crush and Call of Duty studios; what it means for Xbox, Game Pass, and flagship franchises

In a shocking turn, Microsoft's gaming division began cutting hundreds of employees on Wednesday, July 2. This is the second major layoff in months and the largest in the last two years. This week, the mass layoffs rolled through its global studios, with the makers of Candy Crush and Call of Duty. Last year in June, Microsoft employed 228,000 full-time workers.

The job cuts come as part of a wider corporate downsizing, with Microsoft announcing a staggering 9,000 layoffs across all departments on Wednesday. According to ToI, the subsidiaries across the gaming industry were told that they would be affected by the layoffs, including the King division, the company that makes Candy Crush.

The company's giant Stockholm-based King studio is cutting 10 per cent of its staff, which is about 200 jobs. Along with this, Call of Duty maker Raven Software has announced workforce reductions.



Employees at ZeniMax Media, the parent company of studios such as Bethesda, known for Fallout and The Elder Scrolls, have also been notified about ongoing layoffs. Xbox teams based in the U.S. are anticipated to receive updates by the end of the week.

The restriction marks another setback for Microsoft's gaming segment, which already faced 6,000 layoffs in May, primarily affecting the product and engineering teams. With over 15,000 employees laid off in just two rounds this year, it now stands as the company's most significant workforce reduction since the tech industry layoffs took place during the pandemic.


According to Bloomberg, the Microsoft gaming CEO, Phil Spencer, said, "To position gaming for enduring success, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness."

However, Spencer did not reveal the exact numbers; the memo confirmed that affected employees would be “given priority review” if they applied for other jobs within the company. Amid all of this, many in the gaming division, particularly those in Europe, faced more confusion than comfort.


Microsoft insists its “platform, hardware, and game roadmap have never looked stronger,” signalling an ongoing commitment to Game Pass, cloud gaming, and flagship franchise titles.

However, with thousands of jobs eliminated and several studios shut down or merged, the company’s future in gaming appears more streamlined but also more uncertain. The company has not disclosed the future titles or projects that may be scaled back due to the restructuring of the company.