Microsoft Cuts Workforce Amid Economic Downturn

Microsoft's Recent Layoffs Continue Across Multiple Divisions

Reports indicate 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 experienced significant upheaval in recent years, with numerous companies, including Microsoft, announcing substantial workforce reductions in 2024. This wave of layoffs has affected both large studios and smaller independent developers, with recent examples including IllFonic (Predator: Hunting Grounds) and People Can Fly (Outriders). Rocksteady Studios also recently announced layoffs following the mixed reception of Suicide Squad: Kill the Justice League.

Microsoft itself has been significantly impacted, with reported Xbox workforce reductions since the beginning of 2024. In January 2024, the company announced the elimination of 1,900 Xbox-related positions, including roles within acquired companies like Activision Blizzard and ZeniMax. A subsequent September layoff impacted 650 corporate and support staff at Activision Blizzard.

A new report from Business Insider (via GamesIndustry.biz) suggests another round of layoffs has occurred. While a Microsoft spokesperson confirmed the cuts, the precise number of affected employees remains unconfirmed. These latest reductions are distinct from earlier January cuts targeting underperforming employees outside the Xbox division.

The Broader Context of Microsoft's Layoffs

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

Previous Microsoft layoffs have also affected Xbox's physical retail teams, most of Blizzard's customer service team, and internal development studios such as Sledgehammer Games and Toys for Bob. Blizzard's unannounced survival game, codenamed Project Odyssey, was also canceled following these reductions. The impact of the latest layoffs on the Xbox gaming division remains to be seen, as the number of affected employees is yet to be officially confirmed.