Microsoft gaming division suffers additional layoffs

Final week, it was rumored that Microsoft was preparing for a serious spherical of layoffs throughout the Xbox group. Bloomberg is now reporting that workers within the firm’s gaming division have been knowledgeable of job cuts Wednesday morning. The PC large has been on a cost-cutting mission these days, announcing it will let go of three p.c of its international workforce earlier this summer time, and asserting a further 9,000 job cuts on Wednesday.

Based on Bloomberg, Microsoft’s Stockholm-based King division, well-known for Sweet Crush, is shedding 10 p.c of its workers, representing roughly 200 jobs. Whereas another European gaming workplaces 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 workers relating to the layoffs, which was obtained by Windows Central and confirmed as genuine by Microsoft. In it, Spencer mentioned, “I acknowledge that these modifications 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 presently relies 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.”

Here is Phil Spencer’s full notice to workers:

At the moment we’re sharing choices that can affect colleagues throughout our group. To place Gaming for enduring success and permit us to deal with strategic development 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 as we speak, the specifics of as we speak’s notifications and any organizational shifts will likely be shared by your group leaders within the coming days.

I acknowledge that these modifications 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 presently relies 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’ll shield what is prospering 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 will 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 as we speak with out the time, vitality, and creativity of these whose roles are impacted. These choices usually are not a mirrored image of the expertise, creativity, and dedication of the folks concerned. Our momentum just isn’t unintended—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 sources to assist their transition. Workers whose roles have been eradicated are inspired to discover open positions throughout Microsoft Gaming, the place their purposes will likely be given precedence overview.

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

As a part of as we speak’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 group by Matt Booty, head of Xbox Sport Studios, who mentioned Microsoft “didn’t make these selections evenly, as every challenge and group signify years of effort, creativeness, and dedication.”

Here is Matt Booty’s full notice to workers:

Following Phil’s notice, I need to share extra in regards to the modifications to the Studios enterprise items.

We’ve made the choice to cease growth 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 in all our studios, The Initiative. These choices, together with different modifications throughout our groups, replicate a broader effort to regulate priorities and focus sources to arrange our groups for better success inside a altering trade panorama. We didn’t make these selections evenly, as every challenge and group signify years of effort, creativeness, and dedication.

Our total portfolio technique is unchanged: construct video games that excite our gamers, proceed to develop our largest franchises, and create new tales, worlds, and characters. We’ve greater than 40 tasks in lively growth, continued momentum on titles transport this fall, and a robust 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 doable, 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 over 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 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 p.c of recreation builders shedding their jobs in 2024. Microsoft’s income have been on a gentle upward trajectory, with the corporate reporting over $25 billion in web 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 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 obscure remark from a Microsoft spokesperson.

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