Microsoft said 1,600 roles were going effective immediately as part of a change-up that will see four gaming studios depart
Microsoft is axing 3,200 jobs as it tries to restructure Xbox. The tech firm said 1,600 roles were going effective immediately as part of a change-up that will see four gaming studios depart.
Another is now in consultation over its future. Xbox boss Asha Sharma called it the most “significant” restructure in the console maker’s history.
She said the move was vital because its gaming business “is not healthy”.
South of Midnight developer Compulsion Games and Psychonauts developer Double Fine Productions will transition to independent studios, Sharma said.
And Hellblade makers Ninja Theory and State of Decay developer Undead Labs “have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3”.
There are also job cuts across other parts of Xbox, including Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios.
But none of their first-party publicly announced games are cancelled, meaning the likes of Fable, Gears of War: E-Day, Clockwork Revolution, Call of Duty: Modern Warfare 4, Minecraft Dungeons 2 and The Elder Scrolls 6 will release as expected.
Ms Sharma is said to have told staff in an email: “I know this is painful. These changes will directly affect people who have poured their creativity into building Xbox.
“Many joined us through acquisitions, while others were recruited here, or sought us out because they loved this industry and loved Xbox.
“Today’s decisions do not reflect their talent or dedication. Our business today is not healthy.
“We are operating at margins that are 3–10x lower than comparable platform and publishing businesses.
“We have learned that we are not the best home for every type of studio; in a typical year, we lost 64 cents for every dollar we invested.
“We know that great technology gets better when it gets simpler, not bigger. Today, in some parts of the company, work passes through as many as 14 layers of management.
“We will reduce management layers to no more than five, and where possible, three. These changes are about a bigger future for Xbox, not a smaller one.
“The next decade of gaming will be larger, more global, and more creative than anything we’ve seen before. This year, we’ll invest as much in Xbox as we ever have, but we’ll invest with greater focus, greater discipline, and greater clarity, all in service of making Xbox where the world plays and creates.”
The cuts follow last July’s round of layoffs at Microsoft, when 9,000 lost their jobs across the entire business.
A number of games were cancelled as part of those cuts, including Rare’s Everwild, and studios shut down, such as Perfect Dark developer The Initiative.