The Xbox team at Microsoft is being hit with some layoffs this week, as the company recently issued an internal letter to employees about the job cuts. Head of Microsoft Gaming Phil Spencer states that the layoffs will impact 650 employees across its global workforce. That’s about 3% as reported by Variety. It’s said that the jobs were mostly throughout the “corporate and supporting functions,” but some employees are also being laid off from a few of the company’s development teams.
Specifically, the teams that work on Call of Duty: Warzone Mobile, and Warcraft Rumble. The Warcraft Rubmble cuts are said to be due to the game now being launched and Microsoft looking to reduce the overall number of staff from that team. Some employees from the Call of Duty: Warzone Mobile team were also repositioned into other roles within Activision Blizzard following the layoffs.
Spencer also says that the decision to make these cuts was to help prioritize their business for long-term success. He also states that “no games, devices or experiences are being canceled.”
The Microsoft Xbox layoffs do not include any studio closures
Unlike Microsoft’s most recent round of layoffs prior to the ones this week, these new staff reductions don’t include the closure of any studios. Back in May, Microsoft announced that it would be closing down the studios behind the games Redfall and Hi-Fi Rush. Redfall developer Arkane Studios and Hi-Fi Rush developer Tango Gameworks were both shuttered at the beginning of May. Krafton Inc. recently announced it would be acquiring Tango Gameworks, however. With about 50 of the original 100 staff members transferring over.
Even earlier this year, Microsoft laid off over 2,000 employees in late January across several gaming divisions. Not more than two weeks later, the FTC said Microsoft’s massive jobs cut was a misrepresentation of its plans for Activision Blizzard following the acquisition.
Microsoft’s recent cuts are part of a wider issue in the game industry
Microsoft’s recent round of layoffs definitely paints a different picture from what the public and regulators were told during the company’s trial over the acquisition. Having said that, it’s also part of a wider issue in the games industry. Microsoft is hardly the only company laying off employees. Sony has also laid off employees following its large acquisition of Destiny 2 developer Bungie. Back at the end of July Bungie announced it would be laying off around 220 employees.
Sony also announced around 900 employees were being laid off back in late February. This was in addition to the closure of London Studio. Take-Two Interactive announced layoffs as well. Having let go of around 600 employees back in April while also announcing game cancellations. Microsoft seems to be issuing more job cuts than other companies that own game studios. However, it’s only a small part of the ongoing problem. Studios ramp up hiring to get games out the door and then make cuts across teams and divisions months later.
It’s an issue that’s going on for at least a few years now. And it doesn’t seem to be slowing down anytime soon.