Almost 2,000 workers in Microsoft’s gaming division are to be laid off after its $69b (£54.3bn) merger deal.
A memo from Xbox boss Phil Spencer sent to workers says the company plans to shed 1,900 of its 22,000 staff.
It was sent three months after the software giant acquired Activision-Blizzard, known for the Call of Duty and Warcraft series.
In the letter, verified as genuine by Microsoft, Mr Spencer says losing staff was a “painful decision”.
First published by tech website The Verge, the message suggests staff within the Xbox division and at publisher Zenimax – which oversees studios including Bethesda and Arkane – will also be affected.
BBC Newsbeat has asked Microsoft for details of how many employees in each business will be affected.
Microsoft finally purchased Activision-Blizzard and Candy Crush creator King last September after a series of battles with regulators.
After the deal went through, Activision CEO Bobby Kotick left the company and was not directly replaced.
And in the wake of the latest news, another senior figure at the company announced he was departing.
Blizzard boss Mike Ybarra, who previously worked at Microsoft, said in a statement it had been “an honour” to lead the company “through an incredible time” and he would return to being its “biggest fan from the outside”.
The video game and tech industries have been hit by a string of layoffs already this year, following a series of redundancy announcements in 2023.
Earlier this week Riot Games, which makes League of Legends, announced it was shedding 11% of its global workforce.
And Microsoft itself announced 10,000 job losses last January across the wider company, with Amazon, Meta and others doing the same.
The BBC has asked Microsoft for further comment on the redundancies in its gaming division.