Xbox prepares to unveil second wave of layoffs this week
Microsoft has recently announced significant job losses as part of a major restructuring effort within its internal game studios, confirming the elimination of 268 positions. This decision comes amidst a broader initiative aimed at consolidating various development teams under the Xbox brand, which is reportedly preparing for a second wave of layoffs in the coming week.
According to a media source, the restructuring efforts will encompass several of Xbox’s gaming divisions, including well-known names like Bethesda, Activision, and Blizzard. Initial projections had indicated the possibility of up to 3,200 employees facing layoffs, with the first round already resulting in 1,600 job losses across key studios such as Obsidian, Bethesda, Id Software, and ZeniMax Online Studios.
As part of this reorganization, Microsoft has also divested five internal studios: Compulsion Games, Double Fine Productions, Ninja Theory, Undead Labs, and Arkane. Both Compulsion Games and Double Fine have successfully transitioned into independent entities, while Ninja Theory and Undead Labs are currently in the process of acquisition. Arkane Lyon has entered discussions regarding its future operations.
In a recent memo, Xbox CEO Asha Sharma elaborated on the rationale behind the restructuring. She indicated that the company’s rapid expansion had led to operational fragmentation, making it difficult to align resources effectively with strategic objectives. As a response, Sharma outlined plans to streamline management, aiming to reduce the layers of oversight from potentially 14 to a maximum of five.
Sharma emphasized the need for a more focused approach, stating that the aim of these changes is to foster long-term growth rather than contraction. She expressed confidence that Xbox can return to a growth trajectory by 2027, reinforcing the company’s commitment to engaging a vast player base and providing opportunities for creative connections.
Looking ahead, Xbox remains committed to innovation and has recently established a partnership with Kojima Productions to publish the anticipated title “Physint,” originally dropped by another publisher. This collaboration has been characterized by Sharma as a pivotal moment for the company, indicating a forward-thinking agenda as it navigates these challenging transitions.
In summary, Microsoft’s ongoing restructuring, driven by a desire to consolidate and refocus its operations, highlights the shifting landscape of the gaming industry as companies adapt to evolving market demands.
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