Microsoft is reportedly preparing for significant workforce reductions within its gaming division, with announcements potentially coming as soon as next week.
Bloomberg reports that the company is planning "major" job cuts across its Xbox division. According to The Verge, Microsoft managers have been briefed on these impending Xbox layoffs, which are part of broader company-wide cuts expected to disproportionately affect sales teams.
For the gaming division specifically, these cuts are reportedly being timed ahead of the launch of Microsoft's next-generation consoles. Last week, Microsoft announced a partnership with AMD to power its future Xbox hardware, including first-party consoles. The company has not yet revealed a launch timeline for these new devices.
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Further reporting from The Verge indicates Microsoft is restructuring its Xbox distribution network in Central Europe and will cease operations in some regional markets.
Microsoft employees speaking anonymously to IGN to protect their positions say staff are preparing for layoffs, characterizing the situation as a matter of "when," not "if."
This anticipation is understandable given Microsoft's extensive restructuring of its gaming business following the $69 billion acquisition of Activision Blizzard. The company laid off 1,900 employees in January 2024, followed by further cuts months later with the closure of Arkane Austin (developer of Redfall) and Tango Gameworks (developer of Hi-Fi Rush). In September 2024, Microsoft cut an additional 650 positions from its gaming teams. Then, in May of this year, the company announced a staggering reduction of 6,000 staff, representing roughly 3% of its total global workforce.
In a June 2024 interview with IGN, Xbox head Phil Spencer addressed these difficult decisions: "I have a responsibility to run a sustainable and growing business within the company. That sometimes requires making hard choices—choices I don't personally relish, but which need to be made."
