Anamika Dey, editor
Brief news
- Microsoft is cutting 650 jobs in its Xbox division, marking the third round of layoffs since acquiring Activision Blizzard for $69 billion.
- CEO Phil Spencer stated the layoffs aim to align the team structure for long-term success, with exit packages offered to affected employees.
- The gaming industry is facing widespread layoffs, with other companies like Sony and Unity also reducing staff, while Microsoft emphasizes that no studios or game titles are being closed.
Detailed news
In the most recent significant round of redundancies to affect the video game industry, Microsoft has announced that it is eliminating 650 positions within its Xbox gaming division.
This is the third series of redundancies in Microsoft’s video game unit since the company’s $69 billion acquisition of Activision Blizzard, the publisher of the Call of Duty franchise.
CNBC was informed by the U.S. technology behemoth that it is eliminating hundreds of positions at Xbox, with the majority of the positions being in “corporate and supporting functions.”
The development was reported by Bloomberg News earlier on Thursday.
Microsoft Gaming’s CEO, Phil Spencer, informed employees in a memo obtained by CNBC that the company had made the “difficult” decision to align its post-acquisition team structure and “organize our business for long-term success.”
Spencer stated in the memo, “We are profoundly appreciative of the contributions of our colleagues who are discovering the extent to which they are affected.”
“In the United States, we are providing them with exit packages that include severance, extended healthcare, and outplacement services to assist them in their transition; packages outside of the United States will vary based on geographical location.”
Microsoft’s gaming chief further stated that “other teams will experience some effects as they adjust to changing priorities and manage the lifecycle and performance of games.”
He emphasized that the redundancies are not resulting in the closure of any studios, and no titles, devices, or gaming experiences are being cancelled.
In an effort to ensure the sustainability of its colossal acquisition of Activision and its broader gaming investment initiative, Microsoft has been reducing costs at Xbox.
ZeniMax Media, the proprietor of Bethesda Softworks, was acquired by the organization for $7.5 billion in 2021. Bethesda is the publisher of prominent gaming titles, including The Elder Scrolls and Fallout.
Microsoft is not the sole gaming giant that is reducing employment. Major gaming studios have eliminated thousands of positions globally, commencing in 2023 and continuing into 2024.
Sony, a Japanese company, declared in February that it would eliminate 900 employees from its PlayStation division.
Significant waves of reductions have also been announced by Unity, a gaming software firm, Twitch, a livestreaming service owned by Amazon, Playtika, a mobile game publisher, and Discord, a social platform.
Nevertheless, Xbox has experienced particularly severe redundancies. In January, Microsoft eliminated 1,900 positions in its gaming division, a mere three months after concluding its acquisition of Activision Blizzard.
Arkane Austin, Tango Gameworks, and Alpha Dog were among the gaming studios that the company announced it would be closing in May. Microsoft has not disclosed the number of positions that were impacted by these measures, but numerous employees were also terminated as part of the shutdowns.
The complete memo from Phil Spencer, CEO of Microsoft Gaming, is available for your review below:
Subject: Changes to Microsoft Gaming
For the past year, our goal has been to minimize disruption while welcoming new teams and enabling them to do their best work. As part of aligning our post-acquisition team structure and managing our business, we have made the decision to eliminate approximately 650 roles across Microsoft Gaming—mostly corporate and supporting functions—to organize our business for long term success.
I know that this is difficult news to hear. We are deeply grateful for the contributions of our colleagues who are learning they are impacted. In the US, we’re supporting them with exit packages that include severance, extended healthcare, and outplacement services to help with their transition; outside the US packages will differ according to location.
With these changes, our corporate and supporting teams and resources are aligned for sustainable future growth, and can better support our studio teams and business units with programs and resources that can scale to meet their needs. Separately, as part of running the business, there are some impacts to other teams as they adapt to shifting priorities and manage the lifecycle and performance of games. No games, devices or experiences are being cancelled and no studios are being closed as part of these adjustments today.
Throughout our team’s history, we have had great moments, and we have had challenging ones. Today is one of the challenging days. I know that going through more changes like this is hard, but even in the most trying times, this team has been able to come together and show one another care and kindness as we work to continue delivering for our players. We appreciate your support as we navigate these changes and we thank you for your compassion and respect for each other.
Phil
Source : CNBC News
