Microsoft Reports Layoffs to Streamline Operations

Microsoft's Recent Layoffs Continue Across Multiple Divisions

Reports indicate that Microsoft has conducted further layoffs, impacting employees across its gaming, security, and sales divisions. The exact number of affected employees remains undisclosed. Importantly, these job cuts are separate from a previous round of layoffs announced earlier in January.

The gaming industry has faced significant challenges in recent years, with numerous companies, including Microsoft, implementing substantial workforce reductions in 2024. This trend has affected both large studios and smaller independent developers, with recent examples including IllFonic (Predator: Hunting Grounds) and People Can Fly (Outriders). Rocksteady also announced layoffs following the mixed reception of Suicide Squad: Kill the Justice League.

Microsoft itself has experienced multiple rounds of layoffs since the beginning of 2024. In January, the company announced the termination of 1,900 Xbox division employees, including staff at acquired subsidiaries like Activision Blizzard and ZeniMax. A subsequent September layoff impacted 650 corporate and support employees at Activision Blizzard.

A Business Insider report (via GamesIndustry.biz) suggests a new round of layoffs has occurred. While a Microsoft spokesperson confirmed the cuts, the exact number of employees affected remains unconfirmed, and the spokesperson clarified that these layoffs are unrelated to earlier cuts focused on underperforming employees.

The Impact of Microsoft's Layoffs

Microsoft's ongoing layoffs are particularly noteworthy given its recent acquisitions of major publishers such as Bethesda and Activision Blizzard, and its achievement of a $3 trillion market valuation shortly after the significant January 2024 layoffs. The initial wave of job cuts drew scrutiny from the FTC, which attempted to use the Activision Blizzard layoffs as justification to block or reverse Microsoft's acquisition of the Call of Duty publisher.

Previous Microsoft layoffs have targeted various areas, including Xbox's physical retail teams, a large portion of Blizzard's customer service team, and internal development studios like Sledgehammer Games and Toys for Bob. The cancellation of Blizzard's unannounced survival game, codenamed Project Odyssey, also followed these layoffs.

The scale and impact of this latest round of Microsoft layoffs on the Xbox gaming division remain uncertain, pending further confirmation of the number of employees affected.