Microsoft Restructures Xbox Division, Halting Game Development Amid Major Layoffs

As reported by Bloomberg News, Microsoft’s gaming sector faced significant layoffs on July 2, part of a larger strategy to manage expenses across the tech giant.

While an Xbox representative refrained from disclosing the exact number of affected employees, it was clear that the cuts were extensive.

Various subsidiaries within the gaming division received notifications about impending job losses. Notably, King, based in Stockholm and known for its hit game Candy Crush, is set to reduce its workforce by 10%, translating to around 200 positions. Other European branches like ZeniMax also initiated layoffs early on July 2.

The news regarding additional job reductions emerged gradually as other teams within Microsoft Gaming—including studios behind popular franchises like Call of Duty and Halo—announced their own workforce adjustments.

Moreover,several long-term projects have been scrapped entirely. This includes Everwild from Rare Studio in the U.K., along with a new online title from ZeniMax Online Studios that was anticipated by fans of The Elder Scrolls Online.These cancellations will inevitably lead to further job losses at these studios.

The reboot of Perfect Dark has also been shelved alongside The Initiative studio responsible for it. In a message sent to staff members, Matt Booty, head of Xbox Game Studios, indicated that these decisions are part of a broader initiative aimed at realigning priorities and optimizing resources amid an evolving industry landscape.

On July 2 alone, Microsoft announced plans to cut approximately 9,000 jobs across various departments as part of its second wave of layoffs this year. this follows an earlier reduction were around 6,000 positions were eliminated in may—primarily affecting product and engineering roles.

The gaming division’s employees were expected to learn about specific job cuts throughout the day; as per reports from January 2024 data indicated there were roughly 20,000 individuals working in this sector.

Phil Spencer, CEO of microsoft Gaming stated in an email seen by Bloomberg News that these changes are essential for positioning Gaming for sustainable success while allowing focus on strategic growth areas. He emphasized reducing management layers will enhance agility and effectiveness within teams.

While Spencer did not provide precise figures regarding layoffs , he assured impacted workers would receive priority consideration for any open roles within Microsoft .He expressed confidence in Microsoft’s robust platform , hardware , and game roadmap but acknowledged tough choices must be made now for future success. span > p > Employees had anticipated these cuts as May when company-wide layoffs began , leading many to speculate about potential impacts on the gaming division . This marks Xbox’s fourth major layoff event over the past year and a half . Following microsoft’s acquisition of Activision Blizzard for $69 billion last October , pressure has mounted on their gaming units to improve profit margins substantially . span > p > div >