Rumor: Xbox To Enact "Substantial Cuts" To Staff In New Round Of Layoffs
A new rumor alleges that Xbox will undergo a new round of layoffs in the next week or so.
This new rumor comes from Jason Schreier at Bloomberg, who claims, “Managers within Xbox are expecting substantial cuts across the entire group, according to people familiar with the plans who asked not to be identified discussing nonpublic information.”
This is not the first round of cuts that Xbox has faced over the last two years. In January 2024, the company laid off around 1,900 employees after it acquired Activision Blizzard. At the time CEO of Gaming at Microsoft Phil Spencer explained the cuts were to align “on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business. Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth.”
“As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1,900 roles out of the 22,000 people on our team,” he stated.
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In an interview with Polygon in March 2024, he shared that the cuts were due to what he sees as a lack of growth in in the industry as well as the acquisition of Activision Blizzard. He said, “It’s a little bit of both. But I’ll say the thing that has me most concerned for the industry is the lack of growth. And when you have an industry that is projected to be smaller next year in terms of players and dollars, and you get a lot of publicly traded companies that are in the industry that have to show their investors growth — because why else does somebody own a share of someone’s stock if it’s not going to grow? — the side of the business that then gets scrutinized is the cost side.”
“Because if you’re not going to grow the revenue side, then the cost side becomes challenged,” he added.
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In September 2024, Spencer and Xbox cut another 650 employees. In an email sent to staff that was obtained by IGN, Spencer said, “As part of aligning our post-acquisition team structure and managing our business, we have made the decision to eliminate approximately 650 roles across Microsoft Gaming — mostly corporate and supporting functions — to organize our business for long term success.”
He added, “With these changes, our corporate and supporting teams and resources are aligned for sustainable future growth, and can better support our studio teams and business units with programs and resources that can scale to meet their needs. Separately, as part of running the business, there are some impacts to other teams as they adapt to shifting priorities and manage the lifecycle and performance of games.”
In January, Business Insider reported that Microsoft laid off “employees across organizations including security, experiences and devices, sales, and gaming.” A Microsoft spokesman confirmed the layoffs sharing that they were small, but did not give a specific number.
The company has had a number of big commercial failures over the past year including Compulsion Games’ South of Midnight, Obsidian’s Avowed, Ninja Theory’s Senua’s Saga Hellblade II, and Machine Games’ Indiana Jones and the Great Circle.
What do you make of Xbox going through another round of layoffs?
XBox needs to be less woke than Sony or they’re going to keep bleeding out.
In my opinion consoles are fancy hardware based DRM first and a stable targeted platform with extreme ease of game optimization second. It seems like Microsoft wants to get out of the hardware business and be more like Steam with the whole "This is an Xbox" marketing push. I like bespoke gaming hardware and play regularly on my Xbox Series X.
But with moves like moving to platforms like the ROG Ally, I would not be surprised to see Xbox Branded PCs. There are rumors that Microsoft Games Studios is wanting to push for more emulation of OG Xbox, Xbox 360, and Xbox One titles on the PC.
In the end, all I really want to do is play Mechassault online again on Xbox hardware. Not a big ask! I can do that with Age of Empires which has gotten stellar support over the years.