Final week, it was rumored that Microsoft was preparing for a serious spherical of layoffs throughout the Xbox staff. 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 currently, announcing it could let go of three % of its international 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 employees, representing roughly 200 jobs. Whereas another European gaming workplaces are additionally reducing, US items 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 we’ve got extra gamers, video games, and gaming hours than ever earlier than. Our platform, {hardware}, and recreation roadmap have by no means seemed stronger. The success we’re seeing presently relies on robust selections we have made beforehand. We should make decisions 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 observe to employees:
In the present day we’re sharing selections that can impression colleagues throughout our group. To place Gaming for enduring success and permit us to give attention to strategic progress areas, we’ll 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 as we speak, the specifics of as we speak’s notifications and any organizational shifts will probably be shared by your staff leaders within the coming days.
I acknowledge that these modifications come at a time when we’ve got extra gamers, video games, and gaming hours than ever earlier than. Our platform, {hardware}, and recreation roadmap have by no means seemed stronger. The success we’re seeing presently relies on robust selections we have made beforehand. We should make decisions 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 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 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 selections will not be 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 immediately 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 functions will probably be given precedence evaluation.
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 Excellent Darkish reboot, has been shut down. The information was damaged to the staff by Matt Booty, head of Xbox Recreation Studios, who stated Microsoft “didn’t make these decisions frivolously, as every venture and staff symbolize years of effort, creativeness, and dedication.”
This is Matt Booty’s full observe to employees:
Following Phil’s observe, I wish to share extra concerning the modifications to the Studios enterprise items.
Now we have 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 modifications throughout our groups, replicate a broader effort to regulate priorities and focus sources to arrange our groups for larger success inside a altering trade panorama. We didn’t make these decisions frivolously, as every venture and staff symbolize years of effort, creativeness, and dedication.
Our general portfolio technique is unchanged: construct video games that excite our gamers, proceed to develop our largest franchises, and create new tales, worlds, and characters. Now we have greater than 40 tasks in lively growth, continued momentum on titles transport this fall, and a powerful slate headed into 2026.
For these immediately 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 consider within the power of our groups and the path we’re taking over the trail forward.
Final 12 months, Microsoft slashed almost 2,000 jobs from its gaming division, affecting workers throughout Xbox and Activision Blizzard. In the identical 12 months, 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 % of recreation builders shedding their jobs in 2024. Microsoft’s earnings 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 are 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 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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