Microsoft's wholly-owned in-game advertising firm Massive saw job cuts to some 28% of its workforce today, according to a company representative.

"We have made these adjustments in response to general benchmarks and growth trends in the in-game advertising industry," said the rep to Gamasutra.

"They will allow us operate more efficiently in the future, and we remain committed to growing the business. We foresee no disruption whatsoever to our current relationships with global, blue chip brands and leading game publishers."

The cuts are part of the second wave of Microsoft's cost-cutting initiative, which will see up to 5,000 jobs cut through the middle of 2010.

Massive manages in-game ads for Microsoft and additional publishers, including Activision Blizzard, Electronic Arts, THQ and others.

Microsoft's in-game ad firm Massive today announced it has signed separate deals with both publisher Activision and developer Blizzard.

The Blizzard end of the deal will encompass only the company's Battle.net and website advertisements.

"Massive understands and respects our stance against advertising that might detract from gameplay or offend our players," said Blizzard COO Paul Sams.

Under the terms of the Activision deal, Massive will provide its in-game ads to the publisher over several years, for up to 18 Xbox 360 and PC titles. Guitar Hero: World Tour, Quantum of Solace, and Tony Hawk were named as specific titles that Massive would be handling.

Massive and Activision have worked together in the past, with the ad firm running over 330 campaigns with more than 225 advertisers in titles such as Guitar Hero III and Tony Hawk's Proving Ground.

"By incorporating dynamic in-game advertising in our titles where it is appropriate, we can increase the realism of our games by presenting consumers with authentic environments in genuine settings, while also expanding a key growth opportunity for the company," said head of Activision business development Dave Anderson.