Final week, it was rumored that Microsoft was preparing for a serious spherical of layoffs inside the Xbox crew. Bloomberg is now reporting that staff within the firm’s gaming division had been knowledgeable of job cuts Wednesday morning. The PC big has been on a cost-cutting mission recently, asserting it will let go of three p.c of its world workforce earlier this summer time, and asserting a additional 9,000 job cuts on Wednesday.
In keeping with Bloomberg, Microsoft’s Stockholm-based King division, well-known for Sweet Crush, is shedding 10 p.c of its employees, representing roughly 200 jobs. Whereas another European gaming places of work are additionally chopping, US items are reportedly being knowledgeable later Wednesday.
Phil Spencer, CEO of Microsoft Gaming, despatched an e-mail to all Microsoft Gaming staff relating to the layoffs, which was obtained by Home windows Central and confirmed as genuine by Microsoft. In it, Spencer stated, “I acknowledge that these modifications come at a time when we’ve 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 robust 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.”
This is Phil Spencer’s full notice to employees:
Immediately we’re sharing choices that may impression colleagues throughout our group. To place Gaming for enduring success and permit us to give attention to strategic development areas, we are going to 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 immediately, the specifics of immediately’s notifications and any organizational shifts can be shared by your crew leaders within the coming days.
I acknowledge that these modifications come at a time when we’ve 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 robust 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 shield what is flourishing and focus effort on areas with the best potential, whereas delivering on the expectations the corporate has for our enterprise. This targeted strategy means we will ship distinctive video games and experiences for gamers for generations to return.
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 immediately with out the time, power, and creativity of these whose roles are impacted. These choices are usually not a mirrored image of the expertise, creativity, and dedication of the folks concerned. Our momentum isn’t unintended—it’s the results of years of devoted effort from our groups.
HR is working straight with impacted staff to supply severance plan advantages (aligned with native legal guidelines), together with pay, healthcare protection, and job placement sources to assist their transition. Staff whose roles had been eradicated are inspired to discover open positions throughout Microsoft Gaming, the place their functions can 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 immediately’s layoffs, a number of video games, together with Uncommon’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 Recreation Studios, who stated Microsoft “didn’t make these selections frivolously, as every mission and crew signify years of effort, creativeness, and dedication.”
This is Matt Booty’s full notice to employees:
Following Phil’s notice, I need to share extra concerning the modifications to the Studios enterprise items.
Now we have made the choice to cease growth of Good Darkish and Everwild in addition to wind down a number of unannounced initiatives throughout our portfolio. As a part of this, we’re closing certainly one of our studios, The Initiative. These choices, together with different modifications throughout our groups, mirror a broader effort to regulate priorities and focus sources to arrange our groups for higher success inside a altering business panorama. We didn’t make these selections frivolously, as every mission and crew signify 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 initiatives in energetic growth, continued momentum on titles delivery this fall, and a powerful slate headed into 2026.
For these straight affected, we’re working intently with HR and studio management to supply assist, together with severance, profession transition help, and the place potential, 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 power of our groups and the route we’re taking over the trail forward.
Final yr, Microsoft slashed virtually 2,000 jobs from its gaming division, affecting staff throughout Xbox and Activision Blizzard. In the identical yr, it additionally shuttered a trio of ZeniMax sport growth 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 business has had a rocky couple of years, with an estimated 11 p.c of sport builders shedding their jobs in 2024. Microsoft’s earnings have been on a gradual upward trajectory, with the corporate reporting over $25 billion in internet revenue in its final quarterly report. When requested for remark, a Microsoft spokesperson informed Engadget that the corporate “[continues] to implement organizational and workforce modifications which can 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 obscure remark from a Microsoft spokesperson.
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