Microsoft's Gaming Division Faces Layoffs

Last week, Microsoft was rumored to be preparing for significant layoffs within the Xbox team. Bloomberg now reports that employees in the company's gaming division were informed of job cuts on Wednesday. Microsoft has been focused on cost-cutting, having announced a 3% reduction in its global workforce earlier this summer, with a further 9,000 job cuts announced on Wednesday.

According to Bloomberg, Microsoft's King division in Stockholm, known for Candy Crush, is laying off 10% of its staff, around 200 jobs. Some other European gaming offices are also reducing staff, with US units expected to be informed later on Wednesday.

Phil Spencer, CEO of Microsoft Gaming, sent an email to all Microsoft Gaming employees regarding the layoffs. In the email, Spencer acknowledged the current success of the gaming platform but emphasized the need to prioritize opportunities for future success.

As part of the layoffs, games like Rare's Everwild have been canceled, and The Initiative, the studio working on the Perfect Dark reboot, has been shut down. Matt Booty, head of Xbox Game Studios, communicated these decisions to the team, highlighting the difficulty of the choices made.

Last year, Microsoft cut nearly 2,000 jobs from its gaming division, impacting employees at Xbox and Activision Blizzard. These latest layoffs mark the fourth round of cuts at Xbox in the past 18 months, following Microsoft's acquisition of Activision Blizzard in October 2023.

The gaming industry has seen challenges, with an estimated 11% of game developers losing their jobs in 2024. Despite this, Microsoft's profits have been strong, reporting over $25 billion in net income in its last quarterly report.

Microsoft continues to make organizational and workforce changes to position itself for success in the evolving marketplace.

According to the source: Engadget.