Microsoft to cut 650 jobs at its Xbox gaming unit — read the full memo from top exec Phil Spencer
Phil Spencer, executive vice president at Microsoft, speaks at the company’s Xbox One X reveal event ahead of the E3 Electronic Entertainment Expo in Los Angeles on June 11, 2017.
Patrick T. Fallon | Bloomberg | Getty Images
Microsoft on Thursday said that it is cutting 650 roles at its Xbox gaming division, in the latest major round of layoffs to hit the video game industry.
It marks the third series of redundancies in Microsoft’s video game unit since the company’s blockbuster acquisition of Activision Blizzard, the publisher behind the Call of Duty franchise, for $69 billion in cash.
The U.S. tech giant confirmed to CNBC that it is cutting hundreds of roles at Xbox, in “mostly corporate and supporting functions.”
Bloomberg News reported the development earlier on Thursday.
In a memo obtained by CNBC, Phil Spencer, CEO of Microsoft Gaming, told employees that the firm had taken this “difficult” decision to align its post-acquisition team structure and “organize our business for long term success.”
“We are deeply grateful for the contributions of our colleagues who are learning they are impacted,” Spencer said in the memo.
“In the US, we’re supporting them with exit packages that include severance, extended healthcare, and outplacement services to help with their transition; outside the US packages will differ according to location.”
Microsoft’s gaming chief added that there would be “some impacts to other teams as they adapt to shifting priorities and manage the lifecycle and performance of games.”
He stressed that no games, devices or gaming experiences were being cancelled, and that no studios are being closed as a result of the redundancies.
Microsoft has been cutting back on costs at Xbox in an effort to make its mammoth takeover of Activision and its broader investment drive on gaming sustainable.
The company previously purchased ZeniMax Media, the owner of Bethesda Softworks, for $7.5 billion in 2021. Bethesda publishes major gaming titles, such as the Fallout and The Elder Scrolls series.
Microsoft isn’t the only gaming titan slashing jobs. Major gaming studios have cut thousands of jobs around the world, beginning in 2023 and continuing into 2024.
In February, Japan’s Sony announced it was laying off 900 workers from its PlayStation unit.
Gaming software firm Unity, Amazon-owned livestreaming service Twitch, mobile game publisher Playtika, and social platform Discord have also announced substantial rounds of layoffs.
Redundancies have nevertheless been particularly brutal at Xbox. Microsoft cut 1,900 jobs in its gaming division in January, just three months after closing its acquisition of Activision Blizzard.
In May, the company announced it was closing a number of gaming studios, including Arkane Austin, Tango Gameworks, and Alpha Dog. Several employees were also laid off as part of the shutdowns, although Microsoft has not disclosed how many jobs were affected by these measures.
You can read the full memo from Phil Spencer, CEO of Microsoft Gaming, below:
Subject: Changes to Microsoft Gaming
For the past year, our goal has been to minimize disruption while welcoming new teams and enabling them to do their best work. As part of aligning our post-acquisition team structure and managing our business, we have made the decision to eliminate approximately 650 roles across Microsoft Gaming—mostly corporate and supporting functions—to organize our business for long term success.
I know that this is difficult news to hear. We are deeply grateful for the contributions of our colleagues who are learning they are impacted. In the US, we’re supporting them with exit packages that include severance, extended healthcare, and outplacement services to help with their transition; outside the US packages will differ according to location.
With these changes, our corporate and supporting teams and resources are aligned for sustainable future growth, and can better support our studio teams and business units with programs and resources that can scale to meet their needs. Separately, as part of running the business, there are some impacts to other teams as they adapt to shifting priorities and manage the lifecycle and performance of games. No games, devices or experiences are being cancelled and no studios are being closed as part of these adjustments today.
Throughout our team’s history, we have had great moments, and we have had challenging ones. Today is one of the challenging days. I know that going through more changes like this is hard, but even in the most trying times, this team has been able to come together and show one another care and kindness as we work to continue delivering for our players. We appreciate your support as we navigate these changes and we thank you for your compassion and respect for each other.
Phil
Technology
Sam Altman says OpenAI will top $20 billion in annualized revenue this year, hundreds of billions by 2030
OpenAI CEO Sam Altman speaks to media following a Q&A at the OpenAI data center in Abilene, Texas, U.S., Sept. 23, 2025.
Shelby Tauber | Reuters
OpenAI CEO Sam Altman said Thursday that the artificial intelligence startup is on track to generate more than $20 billion in annualized revenue run rate this year, with plans to grow to hundreds of billions in sales by 2030.
The company has inked more than $1.4 trillion of infrastructure deals in recent months to try and build out the data centers it says are needed to meet growing demand. The staggering sum has raised questions from investors and others in the industry about where OpenAI will come up with the money.
“We are trying to build the infrastructure for a future economy powered by AI, and given everything we see on the horizon in our research program, this is the time to invest to be really scaling up our technology,” Altman wrote in a post on X. “Massive infrastructure projects take quite awhile to build, so we have to start now.”
OpenAI was founded as a nonprofit research lab in 2015, but has become one of the fastest-growing commercial entities on the planet following the launch of its chatbot ChatGPT in 2022. The startup is currently valued at $500 billion, though it’s still not profitable.
In September, OpenAI CFO Sarah Friar told CNBC that OpenAI was on track to generate $13 billion in revenue this year.
Friar caught the attention of the Trump administration this week after she saying at at event that OpenAI is looking to create an ecosystem of banks, private equity and a federal “backstop” or “guarantee” that could help the company finance its investments in cutting-edge chips.
She clarified those comments late Wednesday, writing in a post on LinkedIn that OpenAI is not seeking a government backstop for its infrastructure commitments.
“I used the word ‘backstop’ and it muddied the point,” Friar wrote. “As the full clip of my answer shows, I was making the point that American strength in technology will come from building real industrial capacity which requires the private sector and government playing their part.”
Venture capitalist David Sacks, who is serving as President Donald Trump’s AI and crypto czar, said Thursday that there will be “no federal bailout for AI.” He wrote in a post on X that if one frontier model company in the U.S. fails, another will take its place.
Altman said Thursday that OpenAI does “not have or want government guarantees for OpenAI datacenters.” He said taxpayers should not bail out companies that make poor decisions, and that “if we get it wrong, that’s on us.”
“This is the bet we are making, and given our vantage point, we feel good about it,” Altman wrote. “But we of course could be wrong, and the market—not the government—will deal with it if we are.”
WATCH: Trump AI czar David Sacks says ‘no federal bailout for AI’ after OpenAI CFO’s comments
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during a dinner with tech leaders in the State Dining Room of the White House in Washington, DC, US, on Thursday, Sept. 4, 2025. US President Donald Trump said he would be imposing tariffs on semiconductor imports “very shortly” but spare goods from companies like Apple Inc. that have pledged to boost their US investments. Photographer: Will Oliver/EPA/Bloomberg via Getty Images
Will Oliver | Bloomberg | Getty Images
Meta projected that 10% of its overall sales in 2024, or about $16 billion, came from running online ads for scams and banned goods, according to a Thursday report from Reuters.
Those kinds of ads included promotions for “fraudulent e-commerce and investment schemes, illegal online casinos and the sale of banned medical products,” according to the Reuters report, which was based on internal company documents. Those documents showed the company’s attempts to measure the prevalence of fraudulent advertising on its apps like Facebook and Instagram.
Meta brought in more than $164.5 billion in overall sales for 2024. Last week, the company said that third-quarter sales rose 26% year-over-year to $51.24 billion and that it lifted the low end of its total expenses for the year by $2 billion as part of its massive investments into artificial intelligence.
The Reuters report cited a December 2024 document that showed how Meta each year generates roughly $7 billion in annualized sales from so-called “higher risk” scam ads, which are promotions that are clearly deceptive. Each day, Meta shows users an estimated 15 billion of these higher risk scam ads, the Reuters report said, citing a separate document.
Although some of the documents show that Meta aims to reduce the amount of bogus ads on its platform, the Reuters report also said that other documents suggest the company is concerned that its business projections could be impacted by any abrupt removal of the fraudulent promotions.
A Meta spokesperson said that the company “aggressively” addresses scam and fraud ads on its apps. The projections that 10% of the company’s 2024 ad sales came from bunk ads “was a rough and overly-inclusive estimate rather than a definitive or final figure; in fact, subsequent review revealed that many of these ads weren’t violating at all,” the spokesperson said in a statement.
“Unfortunately, the leaked documents present a selective view that distorts Meta’s approach to fraud and scams by focusing on our efforts to assess the scale of the challenge, not the full range of actions we have taken to address the problem,” the spokesperson said.
WATCH: Wall Street backs AI winners, and Meta’s not one of them this quarter.
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