Summary
- Microsoft is reportedly planning to lay off under 4% of its workforce, around 9,000 employees.
- The layoffs will include members of the Xbox gaming division.
- Phil Spencer, Xbox head, highlighted tough decisions to prioritise key opportunities for long-term success.
- This marks the fourth round of layoffs at Microsoft and Xbox in two years.
What’s Happening With Microsoft?
Microsoft is reportedly preparing to lay off about 9,000 employees, which is less than 4% of its total workforce of roughly 228,000 people. This round of layoffs isn’t just limited to general corporate roles — the Xbox gaming division will also see cuts.
Phil Spencer, the head of Xbox, addressed the situation in a memo to staff. He acknowledged that Microsoft currently has more players, games, and gaming hours than ever before. However, he explained that these layoffs come as part of a strategy to focus on the strongest opportunities and ensure long-term success.
Spencer emphasised the need to concentrate efforts on areas with the greatest potential while protecting what’s thriving.
Microsoft Lay Off: Why Now?
This isn’t Microsoft’s first major layoff in recent times. Over the past two years, the company has gone through multiple rounds of cuts, including letting go of some studios within the Xbox umbrella, such as Alpha Dog Games and Roundhouse Studios.
The 2023 acquisition of Activision Blizzard, valued at $68.7 billion, likely increased expectations and pressure on the gaming division to deliver strong results.
Growth for Xbox Game Pass, Microsoft’s subscription gaming service, has been slower than anticipated. The service currently boasts about 35 million subscribers, far short of the 100 million goal Microsoft set for 2030. This may be contributing to the decision to tighten focus and make tough choices within the company.
Now, while the exact studios and projects affected haven’t been confirmed, rumours suggest that up to 2,000 Xbox jobs could be cut, potentially up to 20% of the gaming division’s workforce. For example, Turn 10 Studios, known for Forza Motorsport, is reportedly preparing for possible staff reductions.
Though layoffs are tough news, Microsoft says this focused approach will help it continue to deliver exceptional gaming experiences for years to come. Still, it’s unclear whether this is the last round of cuts or if more will come in the near future.
