Xbox Undergoes Layoffs and Game Cancellations Following Microsoft Job Reductions
Xbox head Phil Spencer informed staff of organizational changes amid increased player engagement.
Major layoffs have been announced at Microsoft, affecting game developers within Xbox across several studios and projects. This occurs as company leadership notes that Xbox engagement remains high.
According to The Seattle Times, 9,000 employees, representing 4 percent of Microsoft’s workforce, are impacted by these reductions, which began Wednesday morning. The complete extent of layoffs within Microsoft’s gaming divisions has not been fully detailed.
"We continue to implement organizational and workforce changes that are necessary to position the company and teams for success in a dynamic marketplace," said Microsoft spokesperson Emily Pirt.
The company indicated that, while gaming divisions are affected, they do not constitute the majority of layoffs. The reductions impact employees across various regions, lengths of service, and teams.
In a message to staff, Microsoft Gaming CEO Phil Spencer stated that Xbox is "following Microsoft’s lead in removing layers of management to increase agility and effectiveness." He acknowledged that these changes are occurring during a period of high player activity. Employees whose positions are being eliminated are encouraged to apply for other roles within Microsoft gaming, where their applications will receive priority consideration.
Spencer also noted that the company will "protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business." Gaming teams across Microsoft are continuing to assess how their roles may be affected, with some teams scheduled to meet later in the day.
Windows Central reports that The Initiative, developer of Perfect Dark, will close as part of the company’s restructuring, and its project to revive the 2000 first-person shooter has been canceled. VGC reports that Rare’s Everwild, an action-adventure game in development for over a decade, has also been canceled. Layoffs are ongoing at other studios, including ZeniMax and King.
Everwild was expected to launch with Game Pass for Xbox Series X/S and PC as a new title from Rare. Limited information was available about the game, and its development had experienced setbacks, including a restart in 2021. The game was officially announced in 2019. In February, Phil Spencer mentioned Everwild as a release he anticipated, stating, "It’s nice to see the team with Everwild and the progress that they’re making."
According to Bloomberg, ZeniMax Online Studios, developer of The Elder Scrolls Online, is canceling a new MMORPG project due to the workforce reductions. Bloomberg also reports approximately 200 layoffs at King, the developer of Candy Crush, and additional layoffs at Raven Software, which develops Call of Duty.
Spencer’s full message to employees is included below:
