Last week, it was rumored that Microsoft was getting ready for a major round of layoffs within the Xbox team. Bloomberg is now reporting that employees in the company’s gaming division were informed of job cuts Wednesday morning. The PC giant has been on a cost-cutting mission lately, announcing it would let go of 3 percent of its global workforce earlier this summer, and announcing a further 9,000 job cuts on Wednesday.
According to Bloomberg, Microsoft’s Stockholm-based King division, famous for Candy Crush, is laying off 10 percent of its staff, representing roughly 200 jobs. While some other European gaming offices are also cutting, US units are reportedly being informed later Wednesday.
Phil Spencer, CEO of Microsoft Gaming, sent an email to all Microsoft Gaming employees regarding the layoffs, which was obtained by Windows Central. In it, Spencer said, "I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger. The success we're seeing currently is based on tough decisions we've made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities."
Last year, Microsoft slashed almost 2,000 jobs from its gaming division, affecting employees across Xbox and Activision Blizzard. In the same year, it also shuttered a trio of ZeniMax game development teams after having acquired the video game holding company in 2021. This will be the fourth round of cuts at Xbox in the last 18 months. These layoffs come against the backdrop of Microsoft’s $69 billion acquisition of Activision Blizzard in October 2023.
The gaming industry has had a rocky couple of years, with an estimated 11 percent of game developers losing their jobs in 2024. Microsoft’s profits have been on a steady upward trajectory, with the company reporting over $25 billion in net income in its last quarterly report.
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