Cells can be microencapsulated in synthetic hydrogel microspheres (microgels) using droplet microfluidics, but microfluidic devices with a single droplet generating geometry have limited throughput, especially as microgel diameter decreases. Here we demonstrate microencapsulation of human mesenchymal stem cells (hMSCs) in small (<100 μm diameter) microgels utilizing parallel droplet generators on a two-layer elastomer device, which has 600% increased throughput vs. single-nozzle devices. Distribution of microgel diameters were compared between products of parallel vs. single-nozzle configurations for two square nozzle widths, 35 and 100 μm. Microgels produced on parallel nozzles were equivalent to those produced on single nozzles, with substantially the same polydispersity. Microencapsulation of hMSCs was compared for parallel nozzle devices of each width. Thirty five micrometer wide nozzle devices could be operated at twice the cell concentration of 100 μm wide nozzle devices but produced more empty microgels than predicted by a Poisson distribution. Hundred micrometer wide nozzle devices produced microgels as predicted by a Poisson distribution. Polydispersity of microgels did not increase with the addition of cells for either nozzle width. hMSCs encapsulated on 35 μm wide nozzle devices had reduced viability (~70%) and a corresponding decrease in vascular endothelial growth factor (VEGF) secretion compared to hMSCs cultured on tissue culture (TC) plastic. Encapsulating hMSCs using 100 μm wide nozzle devices mitigated loss of viability and function, as measured by VEGF secretion.