Microsoft Gaming and the company’s Xbox brand are expected to bear the brunt of the tech giant’s latest cuts. Image: Shutterstock
Tech giant Microsoft is laying off around 9,000 more employees, or about four per cent of its workforce, in a new round of cuts largely impacting its Xbox gaming business and causing some already-announced games to be cancelled.
Microsoft Gaming, the division which controls the Xbox brand, is expected to bear the brunt of the latest redundancies as Microsoft aims to reduce costs and remove some layers of management.
The cuts come after the company culled around 6,000 jobs in May, or around three per cent of its full-time workforce, by also “reducing layers with fewer managers”.
The latest round of redundancies appeared to be in a similar vein, with Microsoft Gaming CEO Phil Spencer reportedly telling employees in an internal memo the division would “end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness”, according to The Verge.
A Microsoft spokesperson also told US media the company would “continue to implement organisational changes necessary to best position the company and teams for success in a dynamic marketplace”.
Perfect Dark, Everwild among games cancelled
Xbox’s president of game content and studios, Matt Booty, told employees in a memo on Wednesday that Microsoft would close Californian gaming studio The Initiative, which had been working on a reboot of the Perfect Dark video game series.
Xbox Game Studios would also end development of Rare’s action-adventure game Everwild, which had allegedly been in the works since 2014.
Booty reportedly told staffers Xbox would “wind down several unannounced projects across our portfolio”, according to The Verge.
“These decisions, along with other changes across our teams, reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape,” he reportedly said.
“We did not make these choices lightly, as each project and team represent years of effort, imagination, and commitment.”
A reboot of the ‘Perfect Dark’ series (left) and action-adventure game Everwild (right) have been cancelled. Images: Xbox
Microsoft’s Turn 10 Studio, which develops Xbox’s Forza Motorsport titles, was expected to lose at least 70 jobs — the “vast majority” of the studio.
Swedish-British video game studio King, best known for mobile game Candy Crush and acquired by Microsoft when it took over parent company Activision Blizzard in 2023, was expected to cut around 10 per cent of its staff, or around 200 jobs, according to Bloomberg.
The publication also reported an unannounced online game being developed by Zenimax Online Studios, the makers of Elder Scrolls Online, had also been cancelled.
Raven Software and Sledgehammer Hames, which had worked on the lucrative Call of Duty series Microsoft now owns, also reportedly lost some roles, as did Microsoft’s Halo Studios.
Latest cuts since Activision Blizzard acquisition
Microsoft Gaming has carried out several rounds of job cuts of various sizes since its acquisition of Activision Blizzard, including laying off around 1,900 employees across Xbox Game Studios and Activision Blizzard in early 2024.
That was followed by the closure of several game studios in May 2024, including Redfall developer Arkane Austin, Hi-Fi Rush developer Tango Gameworks, and mobile game developer Alpha Dog Games.
Microsoft Gaming then announced it would cut around 650 roles in September 2024, when Phil Spencer reportedly told staff the changes were the result of “aligning our post-acquisition team structure” following Microsoft’s takeover of Activision Blizzard.
Despite Microsoft’s foothold in PC gaming, its Xbox brand has faced fierce competition from more popular console platforms such as Sony’s PlayStation and Nintendo’s Switch.
The company has invested heavily in major acquisitions in recent years in attempts to bolster its lineup of gaming titles, spending around $US68 billion on Activision Blizzard and $US7.5 billion on ZeniMax Media — the parent company of Doom and Fallout studio Bethesda Softworks.
