Update 02/07/2025: A memo from Microsoft gaming division head Phil Spencer to employees has been published online by The Verge and others, as Microsoft is reportedly laying off as many as 9,000 employees across the entire company.
In the statement, Spencer says these changes are being made "To position Gaming for enduring success and allow us to focus on strategic growth areas." He also states that more specifics around these cuts will be dolled out across the next few days, which means we'll continue to see the damage these layoffs have done over the course of the week.
Spencer also admits that these cuts are coming at a time when the numbers from the Gaming division are actually on the rise, though considering that Tango Gameworks' reward for making an award-winning title in Hi-Fi Rush was being shut down, its practically part of Microsoft's playbook to enact these mass layoffs in good times and bad.
"I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger," Spencer writes. "The success we're seeing currently is based on tough choices we've made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities."
Further in the statement, Spencer acknowledges that Microsoft and Xbox would not be in its current position of strength without the work of the employees who are being impacted today. "Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted. These decisions are not a reflection of the talent, creativity, and dedication of the people involved. Our momentum is not accidental - it is the result of years of dedicated effort from our teams."
Part of the cuts reportedly include the cancellation of Rare's next major title, Everwild, which had reportedly been in development for the better part of a decade before its cancellation.
Original Story:
After reports from Bloomberg and The Verge last week revealed that Microsoft was setting up for another round of mass layoffs to its gaming division, Bloomberg now reports that the layoffs have begun, with 200 employees already impacted at Stockholm-based King studio, the team behind popular mobile title Candy Crush.
Those are just the first round of reported cuts, with unknown numbers of employees being told to brace for layoffs at ZeniMax offices across Europe, while American employees are due to find out the details of how many people will be laid off later today, according to Bloomberg.
These layoffs are the fourth instance of mass layoffs at Microsoft and its Xbox gaming division in the last 18 months, dating back to the 1,900 people Microsoft laid off in January 2024, months after it closed its acquisition of Activision Blizzard King.
Shortly after that Xbox shuttered four ZeniMax studios, including Tango Gameworks and Arkane Austin, and months after that, another 400 developers were laid off from Activision teams based in California.
If the rumors from last week regarding these cuts are correct, then we should expect the totality of today's cuts to be closer to 2,000 people losing their jobs, and the shuttering of more studios, though it's unclear which team will be cut at the time of this writing. A cut that big would be 10% of the total employee head count in Microsoft's gaming division, which reportedly has 20,000 employees.
The cuts to the King studio in Stockholm were approximately 10% of the studio, so it might be a sweeping 10% cut across the board.
We'll continue to update this story as more details around the cuts are revealed.
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