Date:
November 22, 2024
This is the second time in the year that Microsoft has laid off employees from its Xbox gaming division, making the total headcount to be 2550.
Three months after the Activision Blizzard (makers of gaming titles like Call of Duty, Tony Hawk, Crash Bandicoot, etc.) acquisition at a price tag of $68.7 billion, Microsoft laid off 1900 employees from its Xbox gaming division in January 2024. But right after a couple of months, on 12th September 2024, history repeated itself when the company decided to lay off 650 employees from the same division.
In an internal memo circulated amongst the employees, Phil Spencer (CEO of Microsoft Gaming) stated that over the past year, their focus has been on minimizing disruptions while integrating new teams and empowering them to excel. To better align their team structure following recent acquisitions and effectively manage operations, they made the difficult decision to reduce approximately 650 roles within Microsoft Gaming as they position their business for sustained success.
Phil has also stated that the roles relieved from their position will be mostly from the corporate and supporting departments. He has also stressed the fact that as far as their offerings are concerned, games, devices, or any other experiences won’t be canceled.
Phil also added that in the US, the employees will be supported through exit packages. They will receive severance, extended healthcare support, and even outplacement services. Also, the packages outside the US will differ depending on the location.
But, this has somehow become one of the trends in the industry, where multiple companies have made similar decisions. As per a report, the total number of employees that were laid off in the year 2023 from the gaming industry was estimated to be 11,250.
However, the situation hasn’t improved in 2024 as well. It is estimated that around 6,000 game developers were laid off by the end of January 2024. And, around 11,000 by the end of June 2024.
The overall reason stated for these layoffs has been reported to impact the sustainability of the company, and its longevity in the market. But, in the past also, Microsoft has shelved its previously acquired companies from ZeniMax Media, like Arkane Austin (makers of Dishonored 1 & 2), Tango Gameworks (creators of Hi-Fi Rush and The Evil Within), and Alpha Dog (developers of Mighty Doom and Wraithborne) which also resulted in layoffs.
During our research, we had a reason to believe that Microsoft may have decided to stand against the behemoth PlayStation, as the Playstation 5 console has outsold the Xbox Series X by 30.24 million units. However, they also have been part of this bandwagon by laying off 900 employees, in February 2024.
