Xbox cuts hundreds of jobs – but it’s okay, profits are up and no execs are affected

The predicted job layoffs at Microsoft have begun, with up to 9,000 people losing their jobs, an unknown amount of which work at Xbox.

The predicted job layoffs at Microsoft have begun and so far King and Bethesda parent company ZeniMax are the worst affected.

Some video game rumours seem hard to believe and some seem very obviously true, the moment you hear them. Sadly, the suggestion that Microsoft is due to layoff thousands more staff this week, including a significant number of Xbox employees, was one of the latter.

It’s already begun and the terrible thing is there’s no certainty as to how deep it will cut. Information is leaking out in dribs and drabs, but it already seems that Candy Crush developer King, which Microsoft bought as part of the Activision Blizzard acquisition in 2023, has lost 10% of its staff, amounting to 200 people.

Staff at Bethesda parent company Zenimax, which Microsoft bought in 2021, appear to have lost staff across a number of European and US offices, but exact numbers are not yet known.

There’s definitely going to be much more than that though, as IGN has got hold of an internal memo from Phil Spencer, which implies the layoffs will be focused on whole areas of the business and ‘layers of management’.

‘Today we are sharing decisions that will impact colleagues across our organisation. To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organisational shifts will be shared by your team leaders in the coming days.

‘I recognise that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger. The success we’re seeing currently is based on tough decisions we’ve made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritise the strongest opportunities. We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come.

‘Prioritising our opportunities is essential, but that does not lessen the significance of this moment. Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted. These decisions are not a reflection of the talent, creativity, and dedication of the people involved. Our momentum is not accidental – it is the result of years of dedicated effort from our teams.

‘HR is working directly with impacted employees to provide severance plan benefits (aligned with local laws), including pay, healthcare coverage, and job placement resources to support their transition. Employees whose roles were eliminated are encouraged to explore open positions across Microsoft Gaming, where their applications will be given priority review.

‘Thank you to everyone who has shaped our culture, our products, and our community. We will move forward with deep appreciation and respect for all who have contributed to this journey.’

Update: According to VGC, layoffs have hit UK developer Rare. There’s no detail on how many people have lost their jobs but supposedly troubled game Everwild has been completely cancelled.

Original story continues:

Whether Xbox is heading in the right direction is a matter of opinion but Microsoft as a company is in rude health. It has a current net worth of over $3.66 trillion, and the most recent quarterly profits were up by 18%.

No company in human history has ever had more money and yet today Microsoft is cutting 4% of its global workforce, which amounts to around 9,100 employees.

How many of those work in Xbox and related gaming divisions is currently unclear but rumours suggest it will be between 1,000 and 2,000 people – up to 10% of the gaming workforce.

This is on top of the 650 gaming employees laid off last September and almost 2,000 at the start of 2024.

Throughout all this, the Xbox executive team has remain unaffected, with many of them, such as figurehead Phil Spencer, having been in the same or similar positions for decades. Thus far, there’s been no talk of laying them off or replacing them with AI.

Depending on how and when the information arrives, we’ll either update this story with news of further gaming layoffs or create a new article.

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