Microsoft cuts major team that develops popular product
The tech giant has just made a harsh decision as one of its popular products is facing declining sales.
Microsoft (MSFT) has made a tremendous change to its group of workers, which involves significantly shrinking a significant team through layoffs.
In a new memo sent to employees, which turned into obtained by IGN, Microsoft Gaming CEO Phil Spencer informed personnel that the corporate may perhaps be shedding 650 Xbox employees.
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“As a element of aligning our post-acquisition team structure and managing our business, we now have gotten made the choice to get rid of approximately 650 roles across Microsoft Gaming – mostly corporate and supporting functions – to prepare our business for long-term success,” said Spencer within the memo.
The job cuts come after Microsoft completed its acquisition of online game company Activision Blizzard in October 2023 after first announcing it in 2022.
Spencer also clarified within the memo that the layoffs would now not cancel any “games, devices or experiences” and that the studio would remain open. However it, the change will impact other teams.
“As a element of running the business, there are some impacts to other teams as they adapt to shifting priorities and cope with the lifecycle and performance of games,” said Spencer. Bloomberg/Getty Images
This current round of layoffs in Microsoft’s gaming division follows the January layoffs of 1,900 Activision Blizzard and Xbox employees.
The change also comes after Microsoft revealed in its fourth-quarter earnings report for 2024 that its Xbox content and products and services revenue increased sixty one% when put next with the same time period last year, mainly brought on by the Activision Blizzard acquisition.
However it, at some stage in an earnings call on July 30, which discussed the earnings report, Microsoft revealed that its Xbox hardware revenue decreased by about Forty two% at some stage in the quarter and that it expects continued year-over-year declines.
Gaming industry employees face mass layoffs
Over the past year and a 1/2, mass layoffs have hit the gaming industry. According to up to this point data from Statista, roughly eleven,250 gaming employees worldwide lost their jobs via layoffs in 2023.
The trend won’t end every time soon, as at some stage in the primary six months of 2024, eleven,000 gaming employees lost their jobs.
These layoffs have been widely criticized on social media, where most individuals have blamed the job cuts on “corporate greed.”
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Former Sony Computer Entertainment Europe President Chris Deering recently shot down that criticism at some stage in a up to this point “My Perfect Console with Simon Parkin” podcast interview.
“I don’t think it’s fair to claim that the resulting layoffs have been greed,” said Deering
He also claimed that individuals who were laid off within the gaming industry should “figure out tips on tips on the suitable way to get through it” and that having a skill in game development doesn't mean a lifetime of “poverty or limitation.”
“I presume people were paid some kind of decent severance package, and by the time that runs out … Well, you recognize, that’s life,” said Deering.
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