Microsoft has announced additional layoffs within its Xbox division, a move that comes despite the company’s soaring stock price and increased profits. The latest cuts represent less than 4% of Microsoft’s global workforce, equating to approximately 9,000 employees out of the 228,000 total staff. This reduction includes personnel from Xbox and other divisions.
A Microsoft spokesperson stated that these organizational and workforce changes are essential to position the company and its teams for success in a rapidly changing market. Notably, the Barcelona-based mobile game developer King, known for Candy Crush, is cutting about 10% of its staff, roughly 200 employees. Additionally, layoffs are expected at ZeniMax’s European offices.
Rare, the developer behind Sea of Thieves, has also been impacted, with the cancellation of the long-anticipated game Everwild attributed to these cuts.
Phil Spencer, CEO of Microsoft Gaming, addressed the layoffs in a memo to staff, emphasizing that these difficult decisions are necessary to ensure Xbox’s long-term success. He explained that the company will reduce or cease work in certain business areas and remove layers of management to enhance agility and effectiveness.
Spencer acknowledged the paradox of these layoffs occurring during a period of growth, with more players, games, and gaming hours than ever before. He highlighted that Xbox’s platform, hardware, and game roadmap are stronger than ever.
The current success of Xbox is the result of previous tough decisions made by Microsoft. Spencer stressed the importance of making strategic choices now to secure future success, focusing resources on the most promising opportunities while maintaining high standards for the business.
Over the past few years, Xbox has experienced periodic staff reductions, including layoffs following the acquisition of Activision Blizzard and the closure of several studios acquired from ZeniMax. These measures are part of a broader cost-cutting initiative at Microsoft, which has seen thousands of layoffs company-wide over the last two years.
Despite the layoffs, Microsoft’s financial performance remains robust. The company reported a net revenue of $70.1 billion for the latest quarter, a 13% increase, and a net profit of $25.8 billion, up 18%. Xbox’s division has also shown year-over-year revenue growth, and Microsoft’s stock price has nearly tripled over the past five years.
These workforce adjustments reflect Microsoft’s commitment to sustaining Xbox as a competitive and innovative business in the gaming industry.
