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In January 2023 — CEO Satya Nadella announced Microsoft would lay off 10,000 employees. Microsoft also named Phil Spencer (head of the Xbox brand since 2014), the inaugural CEO of the newly established Microsoft Gaming division, which now houses the Xbox operations team and the three publishers in the company’s portfolio (Xbox Game Studios, ZeniMax Media, Activision Blizzard). On January 18, 2022, Microsoft announced the acquisition of American video game developer and holding company Activision Blizzard in an all-cash deal worth $68.7 billion, which was completed in 2023. In October 2021, Microsoft announced that it began rolling out end-to-end encryption (E2EE) support for Microsoft Teams calls in order to secure business communication while using video conferencing software.
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According to Amy Coleman (chief people officer and executive vice president at Microsoft), the layoffs weren’t due to employee replacements by AI; however, she recognized that AI is transforming workplace dynamics. In conjunction with the layoffs (Microsoft shut down its office in Pakistan), also terminating the employment of its staff there to facilitate the transition to a software-as-a-service and AI business model. In July 2025 (Microsoft revealed yet another series of job cuts), leading to a reduction of about 9,000 employees, marking its largest workforce reduction in more than two years. While the layoffs mainly impacted employees at Activision Blizzard, some workers from Xbox and ZeniMax also faced job loss.
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