Microsoft Reportedly Lays Off More Employees

Microsoft's Recent Layoffs Continue to Impact Gaming, Security, and Sales Divisions

Reports indicate that Microsoft has conducted further layoffs affecting its gaming, security, and sales divisions. While the exact number of employees impacted remains undisclosed, these cuts are separate from a previous round of layoffs announced earlier in January.

The gaming industry has experienced 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's recent layoffs following the release of Suicide Squad: Kill the Justice League further illustrate the industry's instability.

Microsoft itself has been significantly impacted, with reported Xbox workforce reductions beginning in early 2024. In January, the company announced 1,900 layoffs within its Xbox gaming division, encompassing employees at acquired subsidiaries like Activision Blizzard and ZeniMax. A subsequent September layoff affected 650 corporate and support staff at Activision Blizzard.

According to a Business Insider report (via GamesIndustry.biz), another round of layoffs has occurred. While a Microsoft spokesperson confirmed the cuts, the precise number of employees affected remains unconfirmed and described as a "small number". Importantly, these layoffs are distinct from earlier cuts targeting underperforming employees outside the Xbox division.

Microsoft's Layoff Wave and its Implications

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

Previous Microsoft layoffs have impacted various areas, including Xbox's physical retail teams, most of Blizzard's customer service team, and in-house developers such as Sledgehammer Games and Toys for Bob. The cancellation of Blizzard's unannounced survival game, codenamed Project Odyssey, also followed these reductions.

The extent of the latest layoffs remains unconfirmed, and their impact on the Xbox gaming division is yet to be fully determined.