Microsoft Cuts Employees, Repositions Workforce

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

Microsoft itself has experienced multiple rounds of layoffs since the beginning of 2024. In January, the company announced the termination of 1,900 Xbox division employees, including staff at acquired subsidiaries like Activision Blizzard and ZeniMax. A subsequent September layoff impacted 650 corporate and support employees 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 and described as a "small number." These layoffs are distinct from earlier cuts targeting underperforming employees outside the Xbox division.

Microsoft's Layoff Impact and Acquisitions

Microsoft's ongoing layoffs are particularly noteworthy given its recent acquisitions of major publishers such as Bethesda and Activision Blizzard, and its achievement of a $3 trillion market valuation shortly after the January 2024 layoffs. The initial wave of layoffs drew scrutiny from the FTC, which attempted to use them as grounds to oppose or reverse Microsoft's acquisition of Activision Blizzard.

Previous Microsoft layoffs have impacted various areas, including Xbox's physical retail teams, a significant portion of Blizzard's customer service team, and internal development studios like Sledgehammer Games and Toys for Bob. Blizzard's unannounced survival game, codenamed Project Odyssey, was also canceled. The full impact of the latest round of layoffs on the Xbox gaming division remains to be seen.