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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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Amy Coleman, Microsoft’s executive vice president and chief people officer, said the layoffs were not the result of employees being replaced by AI, but acknowledged that AI is changing how work is done. Amid the layoffs, Microsoft also closed its office in Pakistan and laid off its employees there as part of its move toward a software-as-a-service and AI operating model. In July 2025, Microsoft announced another round of layoffs, cutting approximately 9,000 employees in its largest workforce reduction in over two years. The layoffs primarily affected Activision Blizzard employees, but some Xbox and ZeniMax employees were also affected.

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