After weeks of rumors and news of studios either closing or letting go of their teams, it’s now official that Microsoft is laying off nearly 5,000 staff. Rumors have been circulating for weeks that the reaper was roaming the halls of Microsoft, in particular its Xbox division, and now we know that at least 4,800 are getting their walking papers, with around 3,200 from Xbox. Microsoft has said that its portion of these layoffs, roughly 1,600, will come from its Commercial Business division. Microsoft EVP and Chief People Officer Amy Coleman officially revealed news of the layoffs in a lengthy post on Microsoft’s blog page.
“Today we are eliminating around 4,800 roles, about 2.1% of our global workforce, as we focus our people, investments, and energy on the priorities that will keep Microsoft positioned to deliver for customers in a fast-changing industry.”
– Amy Coleman, Microsoft EVP and Chief People Officer
Coleman went on to say that “I also want to be direct that the roles eliminated today are not being replaced by AI,” and added, “At the same time, what is true is that AI is changing how work gets done.”
Xbox CEO Asha Sharma made a similar announcement on Xbox’s news page, where she revealed that 3,200 Xbox employees are being let go. Sharma furthermore stated this was part of a larger plan to “Reset Xbox” and was very poignant in indicating that Xbox is not in a good place and that changes must be made to restructure it. There is to be a massive shakeup at the management level, which will also include four studios leaving Xbox.
- Compulsion Games and Double Fine Productions to “return to management and transition to independent studios with their IP, catalog, and runway for their next games.”
- Ninja Theory and Undead Labs are said to “have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3. In France”
- Arkane is in the midst of “beginning required consultation with its Works Council to review potential strategic options.”
Of the four studios, Arkane’s future seems the most vulnerable as its management is still working on an exit strategy. Sharma said that while none of Xbox’s first-party titles will be affected, there will be reductions in its other studios, which include its own Xbox Game Studios along with Activision, Bethesda/ZeniMax, Blizzard, King, and Mojang.
Sharma is shrinking Xbox’s management layers to further optimize daily operations while adding Helen Chiang as its new Chief Operating Officer with “end-to-end P&L responsibility across content, hardware, platform, and services.”
From Coleman to Sharma, it was expressed that these changes are just beginning and will continue to roll out in the coming 12 months, but Coleman did add that when possible, staff could be retrained and redeployed within Microsoft. It was said that over the last year, nearly 4,000 had been presented with this option and another 500 had done so just this month.