Final week, it was rumored that Microsoft was preparing for a serious spherical of layoffs inside the Xbox crew. Bloomberg is now reporting that workers within the firm’s gaming division have been knowledgeable of job cuts Wednesday morning. The PC big has been on a cost-cutting mission currently, announcing it might let go of three % of its world workforce earlier this summer season, and asserting a further 9,000 job cuts on Wednesday.
In response to Bloomberg, Microsoft’s Stockholm-based King division, well-known for Sweet Crush, is shedding 10 % of its workers, representing roughly 200 jobs. Whereas another European gaming places of work are additionally chopping, US models are reportedly being knowledgeable later Wednesday.
Phil Spencer, CEO of Microsoft Gaming, despatched an e mail to all Microsoft Gaming workers concerning the layoffs, which was obtained by Windows Central and confirmed as genuine by Microsoft. In it, Spencer stated, “I acknowledge that these modifications come at a time when now we have extra gamers, video games, and gaming hours than ever earlier than. Our platform, {hardware}, and sport roadmap have by no means seemed stronger. The success we’re seeing at present is predicated on powerful choices we have made beforehand. We should make selections now for continued success in future years and a key a part of that technique is the self-discipline to prioritize the strongest alternatives.”
Here is Phil Spencer’s full notice to workers:
Right this moment we’re sharing choices that may influence colleagues throughout our group. To place Gaming for enduring success and permit us to concentrate on strategic progress areas, we’ll finish or lower work in sure areas of the enterprise and observe Microsoft’s lead in eradicating layers of administration to extend agility and effectiveness. Out of respect for these impacted right this moment, the specifics of right this moment’s notifications and any organizational shifts will probably be shared by your crew leaders within the coming days.
I acknowledge that these modifications come at a time when now we have extra gamers, video games, and gaming hours than ever earlier than. Our platform, {hardware}, and sport roadmap have by no means seemed stronger. The success we’re seeing at present is predicated on powerful choices we have made beforehand. We should make selections now for continued success in future years and a key a part of that technique is the self-discipline to prioritize the strongest alternatives. We are going to defend what is prospering and focus effort on areas with the best potential, whereas delivering on the expectations the corporate has for our enterprise. This centered strategy means we are able to ship distinctive video games and experiences for gamers for generations to come back.
Prioritizing our alternatives is crucial, however that doesn’t reduce the importance of this second. Merely put, we’d not be the place we’re right this moment with out the time, power, and creativity of these whose roles are impacted. These choices should not a mirrored image of the expertise, creativity, and dedication of the individuals concerned. Our momentum is just not unintentional—it’s the results of years of devoted effort from our groups.
HR is working straight with impacted workers to supply severance plan advantages (aligned with native legal guidelines), together with pay, healthcare protection, and job placement assets to assist their transition. Workers whose roles have been eradicated are inspired to discover open positions throughout Microsoft Gaming, the place their functions will probably be given precedence evaluation.
Thanks to everybody who has formed our tradition, our merchandise, and our neighborhood. We are going to transfer ahead with deep appreciation and respect for all who’ve contributed to this journey.
As a part of right this moment’s layoffs, a number of video games, including Rare’s Everwild, have been cancelled and The Initiative, the Xbox studio which was producing the Good Darkish reboot, has been shut down. The information was damaged to the crew by Matt Booty, head of Xbox Sport Studios, who stated Microsoft “didn’t make these selections calmly, as every venture and crew characterize years of effort, creativeness, and dedication.”
Here is Matt Booty’s full notice to workers:
Following Phil’s notice, I wish to share extra concerning the modifications to the Studios enterprise models.
Now we have made the choice to cease improvement of Good Darkish and Everwild in addition to wind down a number of unannounced tasks throughout our portfolio. As a part of this, we’re closing one among our studios, The Initiative. These choices, together with different modifications throughout our groups, replicate a broader effort to regulate priorities and focus assets to arrange our groups for higher success inside a altering trade panorama. We didn’t make these selections calmly, as every venture and crew characterize years of effort, creativeness, and dedication.
Our total portfolio technique is unchanged: construct video games that excite our gamers, proceed to develop our greatest franchises, and create new tales, worlds, and characters. Now we have greater than 40 tasks in lively improvement, continued momentum on titles delivery this fall, and a robust slate headed into 2026.
For these straight affected, we’re working carefully with HR and studio management to supply assist, together with severance, profession transition help, and the place attainable, alternatives to discover roles on different groups.
To everybody throughout our studios: thanks. Your creativity and resilience proceed to outline who we’re. I imagine within the energy of our groups and the path we’re taking up the trail forward.
Final yr, Microsoft slashed almost 2,000 jobs from its gaming division, affecting workers throughout Xbox and Activision Blizzard. In the identical yr, it additionally shuttered a trio of ZeniMax sport improvement groups after having acquired the online game holding firm in 2021. This would be the fourth spherical of cuts at Xbox within the final 18 months. These layoffs come in opposition to the backdrop of Microsoft’s $69 billion acquisition of Activision Blizzard in October 2023.
The gaming trade has had a rocky couple of years, with an estimated 11 % of sport builders dropping their jobs in 2024. Microsoft’s income have been on a gentle upward trajectory, with the corporate reporting over $25 billion in internet earnings in its final quarterly report. When requested for remark, a Microsoft spokesperson advised Engadget that the corporate “[continues] to implement organizational and workforce modifications which might be essential to place the corporate and groups for fulfillment in a dynamic market.”
Replace, July 2, 6:45PM ET: This story has been up to date a number of occasions since publishing to incorporate affirmation of the particulars of the layoffs, the cancellation of a number of video games, the shuttering of The Initiative, and an infuriatingly imprecise remark from a Microsoft spokesperson.
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