Casualties of Microsoft’s massive layoffs to its Xbox division continue to be discovered, as current leadership lays blame on the decisions of the previous CEO. Asha Sharma, the current CEO of Xbox, was fairly blunt in her Resetting Xbox post regarding the current round of layoffs in progress. By the way, while most media continues to spell Microsoft’s gaming division as Xbox, Sharma did make it a point to use her all-caps version XBOX, another change she decided upon several weeks back. Citing subpar margins, such as being 3-10x lower than similar platforms or that of other publishers, it was pointed out how the past strategy of investing in Game Pass, multi-platform releases, and portfolio expansions did not yield expected growth rates. Confirming weeks of rumors, four studios were officially listed as being let go of in yesterday’s announcement, but it’s also come to be known that id Software, the developer behind the immensely popular Doom franchise, has seen roughly half of its staff cut. This must also be assuredly with another statement made by Sharma.
“We have also learned that we are not the best home for every type of studio; in a typical year, we lost 64 cents for every dollar we invested. As we reset XBOX, we will help independent creators succeed by providing open development tools and audiences to realize their vision.”
– Asa Sharma, Xbox CEO
According to Game Developer, its sources have said upwards of 100 people were let go from id Software. In addition, Bethesda president Jill Braff confirmed that ZeniMax, a partner studio to id Software, is also being restructured. It has been reported that Bethesda’s main focus will now be on its other IPs such as Fallout, Elder Scrolls, and, oddly enough, Doom and Quake, which seems counterproductive given these layoffs. Perhaps AI will be the answer, despite claims by Microsoft that it will not be the case.
Microsoft’s Accessibility efforts are also reportedly included in the carnage of layoffs. Per VGC, a program manager reported in June that they were expected to be cut when staff reduction began, and a test lead has since confirmed that they too were being let go. It appears that more staff from Microsoft’s Accessibility teams are speaking out that they too are being laid off, thus showing how Microsoft’s initiative is yet another victim of the company’s major restructuring.
Investors will likely see a short-term positive to all these cuts because it’s well known that staff cuts are a means to immediate revenue cost adjustments, resulting in what can appear to be long-term profits, but it remains to be seen if Sharma’s team can create a sustainable long-term strategy.