Microsoft gaming division suffers additional layoffs

Final week, it was rumored that Microsoft was preparing for a significant spherical of layoffs throughout the Xbox workforce. 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 time, 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 slicing, US items are reportedly being knowledgeable later Wednesday.

Phil Spencer, CEO of Microsoft Gaming, despatched an electronic mail to all Microsoft Gaming workers relating to the layoffs, which was obtained by Windows Central and confirmed as genuine by Microsoft. In it, Spencer stated, “I acknowledge that these adjustments come at a time when we now have extra gamers, video games, and gaming hours than ever earlier than. Our platform, {hardware}, and recreation roadmap have by no means regarded stronger. The success we’re seeing at present relies on powerful selections 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:

Immediately we’re sharing selections that can affect 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 comply with Microsoft’s lead in eradicating layers of administration to extend agility and effectiveness. Out of respect for these impacted right now, the specifics of right now’s notifications and any organizational shifts will probably be shared by your workforce leaders within the coming days.

I acknowledge that these adjustments come at a time when we now have extra gamers, video games, and gaming hours than ever earlier than. Our platform, {hardware}, and recreation roadmap have by no means regarded stronger. The success we’re seeing at present relies on powerful selections 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’ll defend 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 method means we are able to ship distinctive video games and experiences for gamers for generations to come back.

Prioritizing our alternatives is important, however that doesn’t reduce the importance of this second. Merely put, we’d not be the place we’re right now with out the time, vitality, and creativity of these whose roles are impacted. These selections usually are not a mirrored image of the expertise, creativity, and dedication of the folks concerned. Our momentum is just not unintentional—it’s the results of years of devoted effort from our groups.

HR is working instantly with impacted workers to offer severance plan advantages (aligned with native legal guidelines), together with pay, healthcare protection, and job placement sources to help their transition. Staff whose roles have been eradicated are inspired to discover open positions throughout Microsoft Gaming, the place their purposes will probably be given precedence evaluation.

Thanks to everybody who has formed our tradition, our merchandise, and our group. We’ll transfer ahead with deep appreciation and respect for all who’ve contributed to this journey.

As a part of right now’s layoffs, a number of video games, including Rare’s Everwild, have been cancelled and The Initiative, the Xbox studio which was producing the Excellent Darkish reboot, has been shut down. The information was damaged to the workforce by Matt Booty, head of Xbox Recreation Studios, who stated Microsoft “didn’t make these selections frivolously, as every venture and workforce 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 adjustments to the Studios enterprise items.

We’ve got made the choice to cease growth of Excellent 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 in all our studios, The Initiative. These selections, together with different adjustments throughout our groups, replicate a broader effort to regulate priorities and focus sources to arrange our groups for better success inside a altering business panorama. We didn’t make these selections frivolously, as every venture and workforce 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. We’ve got greater than 40 tasks in lively growth, continued momentum on titles transport this fall, and a powerful slate headed into 2026.

For these instantly affected, we’re working intently with HR and studio management to offer help, 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 consider within the power 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 recreation 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 towards 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 % of recreation builders shedding their jobs in 2024. Microsoft’s earnings have been on a gradual upward trajectory, with the corporate reporting over $25 billion in web earnings in its final quarterly report. When requested for remark, a Microsoft spokesperson instructed Engadget that the corporate “[continues] to implement organizational and workforce adjustments which can be essential to place the corporate and groups for achievement in a dynamic market.”

Replace, July 2, 6:45PM ET: This story has been up to date a number of instances 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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