The mass layoffs at Microsoft have seen several companies under its gaming wing hit hard, from 343 Industries to Bethesda, and Xbox head Phil Spencer gave his thoughts on the layoffs in a company-wide email to remaining employees. It is the latest in a string of mass layoffs by companies across the video game and tech worlds, one of the most notable being Meta laying off roughly 11,000 employees to close out 2022. Spencer appears to address the reason's for Microsoft's own layoffs, indicating it may tie in to recent shakeups across Xbox Game Studios which has thrown the future of some studio's involvement with major franchises into doubt.
Microsoft's mass layoffs were announced in an official post from the company's CEO Satya Nadella in a public blog post, with the cuts coming on the heels of a rocky fiscal quarter which saw a decline in Microsoft's net income but an increase in revenue from cloud-based services. Nadella said the cuts were a necessity as the company looks for new avenues to grow amid an ongoing economic recession and to keep Microsoft prepared for future economic downturns. Those affected by the layoffs were assured if given a 60-day notice, they would be compensated in-line or above the requirements of their respective home country.
Spencer's email, which was acquired by Kotaku, followed shortly after Nadella's blog post to try and address the impact of the layoffs on everyone under the Xbox umbrella. He reiterated what employees had been told by team leaders, saying the cuts "set us up for the long-term success of our products and business" but understands how painful the decisions that had to be made were. He assured employees there will be avenues for leadership "to connect and answer" questions they may have and will try to be as transparent as possible but couldn't speak further on it at the moment.
The layoffs appeared to have a notable influence on the current state of the Xbox Game Studios as at least on studio is being restructured in its wake. 343 Industries seemingly took the biggest hit as Halo Infinite's campaign team would be "restructured," the game's director Joe Staten announced he was leaving the studio to rejoin Xbox Publishing, and the studio would not be leading development of future Halo titles and instead serve as support. The changes were met with blowback from several former developers on social media who called out poor leadership at 343 and Microsoft as one of biggest reasons for Halo Infinite's rough development.
It remains to be seen how much further the layoffs could impact Xbox, especially as Microsoft's pitch to acquire Activision-Blizzard may have hit another major roadblock in the European Union. A report ahead of the layoffs said the EU's antitrust board was going to object to the acquisition, potentially adding to the antitrust issues the possible deal is facing from the US Federal Trade Commission. Whether the deal ultimately gets approved or not, there's no denying 2023 has gotten off to a rough start for Microsoft.
Source: Kotaku