Microsoft has laid off more than 9,000 employees, affecting many subsidiaries in theXboxdivision. Nearly 4% of the multi-trillion-dollar conglomerate’s workforce was cut, even after exceeding$25 billion in profitslast quarter.Rare’sEverwildwas canceled, The Initiative was shuttered alongside itsPerfect Darkreboot also being binned, andCandy Crushdeveloper King has had its workforce slashed. According toBloomberg’sJason Schreier,Call of Dutydeveloper Raven Software andForzastudio Turn 10 were hit by the layoffs, with the latter losing nearly 50% of its staff. Zenimax Online Studios had its upcoming MMO, code-namedBlackbird, canceled, with the team expecting layoffs shortly. More are expected in the coming days from multiple studios.
These newly unemployed workers will not find any consolation fromMicrosoft Gaming CEO Phil Spencer, who, in an internal letter regarding the layoffs, bragged that Xbox has “more players, games, and gaming hours than ever before.”
Spencer’s whole memo, published byInsider Gaming, comes across asan insensitive, insulting collection of crocodile tears from an executive who has repeatedly espoused the strength of the Xbox brand despite multiple rounds of widespread layoffs and numerous studio closures under his tenure. Microsoft went on an unprecedented spending spree hoping to resuscitate its ailing gaming division, but continues to carelessly jeopardize its workers' livelihoods in the name of profit.
Spencer’s Memo To Xbox Staff Credits Laid Off Employees’ “Time, Energy, & Creativity”
Good Job, Now Get Out
Reading Spencer’s memo to his employees, it’s hard to parse why this latest round of layoffs is happening. There’s a lot of reasoning that doesn’t really mean much: “To position [Microsoft] Gaming for enduring success and allow us to focus on strategic growth areas;” “to increase agility and effectiveness;” “protect what is thriving and concentrate effort on areas with the greatest potential.”
The corporate jargon is eye-rolling, butthe rest of the memo is extremely irritating praise being heaped on the legions of employees who were just terminated. “Simply put,” Spencer writes, “we would not be where we are today without the time, energy, and creativity of those whose roles are impacted.” It’s a pat on the back before the door is slammed in your face.
It is legitimately shocking to me that this memo, which was likely reviewed by multiple members of Xbox’s upper management, was sent out. While people’s lives are being thrown into chaos,Spencer has the gall to write, “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.“Sorry about your job, let me brag about how good business actually is.
It’s insulting; there’s no other way to cut it. It’s insulting to the workers being laid off. It’s insulting to the remaining employees who now know that success does not equal job security. It’s insulting to consumers who invest in Xbox products, and who were assured that the multi-billion-dollar acquisitions of ZeniMax, Bethesda, and Activision Blizzard would be handled with competence.
Xbox Has Closed Studios & Canceled Projects Following Expensive Acquisitions
Spending Money, But Not On Workers
In 2020, Microsoft acquired ZeniMax Media – the parent company of Bethesda, Arkane Studios, id Software, Machine Games, Tango Gameworks, and more – for $7.5 billion. Microsoft then shut down Tango Gameworks and Arkane Austin in 2024, with the former eventually being sold to Krafton.
In 2023, Microsoft acquired Activision Blizzard and its third major branch, King, for an astounding $75.4 billion. Between the acquisition and November 2024, roughly 2,500 Activision Blizzard employees were laid off.Following those layoffs, Phil Spencer said, “the Xbox business has never been more healthy,“according toYahoo Finance.
“The business is performing right now,” Spencer said, “and I think that means a more healthy future for hardware and the games we build.“In reality, the future held apotential abandonment of home consoles, following the Xbox Series X and Series S’s continued lackluster sales, and, of course, yet more layoffs.
The sameYahoo Financereport notes a couple of other notable figures. First, following the thousands of layoffs by Microsoft at Activision Blizzard, Microsoft shareholders received “an increase in their dividend payout [of] 10% extra;” Microsoft CEO Satya Nadella also received a compensation increase of 62%. Second, in 2023 and 2024 combined,more than 23,000 game industry employees lost their jobs.
This does not account for the multiple rounds of layoffs this year, including those at Electronic Arts affecting studios likeBioWareandRespawn Entertainment, nor Xbox’s most recent.
It’s Insulting To Be Repeatedly Assured Of Xbox’s Brand Strength As Layoffs Continue
Profits Over People
Microsoft firing employees in droves despite turning a profit is just the largest and most recent example of an enraging industry trend, butit’s cruel that Microsoft Gaming layoffs have been repeatedly married to assurances by Spencer that the Xbox brand remains strong. Every time Xbox hosts a presentation, we’re bombarded with messaging about the brand’s consumer-friendly approach, with Game Pass, Cloud Gaming, and Play Anywhere constantly heralded as the future of the industry.
The aggressive pursuit of service-oriented products is a direct result, however, of Xbox falling far behind its direct competitors, PlayStation and Nintendo.The brand is more important than the people, as evidenced by Spencer’s glib memo, which mirrors his equally hollow words the last time Microsoft fired thousands.
The line is going up to the tune of more than $25 billion last quarter, but it’s apparently not going up enough for Microsoft. Instead of reassessing its spending, or lowering the outrageously high executive compensation, Microsoft is opting to turn its workers' lives upside down. But if you get fired, at least there’s an internal memo from theXboxCEO assuring you and your coworkers, anxiously waiting to know if they’re next on the chopping block, that the brand is strong and business is good.
Xbox Series X/S
Xbox Series X and Xbox Series S are two consoles Microsoft released in November 2020. Like most Xbox models, the Xbox Series X/S was the main competitor to the PlayStation 5. The consoles were the successors to Microsoft’s Xbox One line. While the PS5 and Xbox Series X are comparable interns of graphics, the Xbox Series S provides less powerful graphics around 1080p-1440p and does not contain a disc drive.
