Microsoft has let go of 9,000 employees, while its CEO asserts that the company continues to thrive
Microsoft announced a significant round of layoffs at the beginning of July, affecting approximately 9,000 employees across the company. The tech giant's CEO, Satya Nadella, described the layoffs as difficult decisions in a memo sent to all employees.
The layoffs were particularly impactful on Microsoft's gaming division, Xbox, with several studios and projects being affected. The Initiative, responsible for the new Perfect Dark game, was completely closed down after more than 5 years in development. Rare's Everwild, a long-in-development game, was canceled due to creative difficulties, despite reboot attempts. ZeniMax Online Studios' new MMORPG codenamed Blackbird, intended as a successor to Elder Scrolls Online, was also canceled.
Other studios tied to major franchises were not left untouched. Raven Software, known for its work on Call of Duty, experienced layoffs, along with Turn 10 Studios, the creator of Forza Motorsport, where nearly half the staff was let go. High Moon Studios and Sledgehammer Games, both Call of Duty co-developers, also faced layoffs.
In a move widely speculated to be motivated by Microsoft’s desire to strengthen investment in Artificial Intelligence (AI) capabilities across its gaming division, these cuts seem focused on streamlining the Xbox portfolio by canceling riskier, long-term projects while reallocating resources towards evolving priorities such as AI-driven projects and technology enhancements.
According to Xbox leadership, including Matt Booty, these decisions are aimed at adjusting priorities and focusing resources to better position teams for success within a changing industry landscape. The strategic reprioritization aligns with the industry trend of shifting resources from longer, riskier game developments toward AI-driven projects, offering potential competitive advantage.
Despite the layoffs, Nadella stated that, despite all objective measures, Microsoft continues to thrive. He expressed gratitude to the affected workers for their contributions to Microsoft and wrote that the layoffs present an opportunity to shape, lead, and have a greater impact than ever. Nadella compared the tech industry to an industry with no 'franchise' value, stating that progress isn't linear but dynamic and demanding.
It is important to note that the specific impact of the layoffs on other areas of Microsoft, apart from Xbox, is not discussed in this paragraph. Furthermore, while the number of Xbox employees affected by the layoffs is not specified, Nadella stated that the number of Microsoft employees remains "relatively unchanged" despite the layoffs.
This article is a follow-up to the previous news about Microsoft's layoffs and provides more detailed insights into the specific Xbox projects and studios affected in the recent round of layoffs.
| Studio / Project | Status | Notes | |----------------------|-------------------------------|----------------------------------------| | The Initiative | Closed | Perfect Dark canceled after 5+ years | | Rare / Everwild | Game canceled | 10 years in development, creative issues | | ZeniMax / Blackbird | Game canceled | New MMORPG, successor to Elder Scrolls Online | | Raven Software | Layoffs | Call of Duty co-developer | | Turn 10 Studios | Layoffs (~50% staff reduction) | Forza Motorsport creator | | High Moon Studios | Layoffs | Call of Duty support team | | Sledgehammer Games | Layoffs | Call of Duty co-developer |
What was the impact of Microsoft's layoffs on its gaming division, Xbox? The closure of The Initiative, cancellation of Rare's Everwild, ZeniMax's Blackbird, and layoffs at Raven Software, Turn 10 Studios, High Moon Studios, and Sledgehammer Games were all significant changes in the Xbox portfolio, potentially aligning with Microsoft's increased investment in Artificial Intelligence (AI) capabilities and technology.
