Microsoft's Job Cuts In The Gaming Division Post Activision-Blizzard Acquisition Signal A Major Shake-Up But The Stock Experiences A 13% Year-To-Date Growth

• Microsoft has announced a reduction of about 650 jobs in its gaming division.
• The job cuts are part of a strategic realignment to efficiently manage the expanded gaming portfolio.
• The stock has shown growth, rising by 13% since the start of the year.

Microsoft Corp MSFT is cutting about 650 jobs in its gaming division after its $69 billion acquisition of Activision-Blizzard. These job cuts affect global corporate and support roles, marking a significant structural change within the division.

Earlier this year, Microsoft laid off 1,900 employees in January and closed four gaming studios in May. Phil Spencer, head of Xbox, assured that these layoffs won't lead to game, device, or experience cancellations, nor will they result in studio closures.

The acquisition of Activision-Blizzard, which added brands like King and Zenimax, has expanded Microsoft's gaming portfolio, requiring a realignment to manage the larger operations and improve efficiency.

Despite the layoffs, Spencer reassured that core game development and studio operations remain unaffected, though some teams may see priority changes or adjustments in game lifecycle management.

Microsoft’s workforce adjustments reflect a broader trend in the gaming industry, with other major companies like Sony, Riot Games, and Epic also announcing layoffs due to post-pandemic economic changes and shifting market conditions.

Financially, Microsoft's gaming revenues have increased, mainly due to the Activision-Blizzard acquisition. However, Xbox hardware sales have declined, contrasting with the strong performance of its gaming software and services.

The stock market has responded with mixed reactions. After a mid-year dip, Microsoft's stock has bounced back, rising 6.5% over the past week and recovering 11% from a 17% drop between July and August.

This recovery leaves the stock 9% below its all-time high of $468. Looking ahead, Microsoft's stock is a key focus for investors.

So far this year, it has risen 13%, with potential for more gains if it can break through the trading range of $385 to $468. The stock's performance demonstrates a pattern of volatility and gradual recovery, which has been a consistent theme in recent years.

After the closing bell on Thursday, September 12, the stock closed at $427.00, trading up by 2.84%.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.