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Xbox Announces Layoffs Amid 'Reset' of Video Game Division
posted on by Anita Tai
In a letter addressed to employees and then posted publicly, Microsoft Gaming's CEO Asha Sharma announced on Monday that the company is "resetting" its business with about 3,200 layoffs through the 2027 fiscal year, beginning with about 1,600 layoffs at the time of announcement. Four game studios will also leave Microsoft's Xbox umbrella division.
The four studios are Compulsion Games, Double Fine Productions, Ninja Theory and Undead Labs. Compulsion and Double Fine will "return" to their current management and transition to independent studios with their IPs, while Ninja Theory and Undead Labs will come under unnamed new ownership. The management of another studio, Arkane in France, has launched "required consultation with its Works Council to review potential strategic options."
Microsoft is shifting investments across its divisions to higher priority projects, with reductions to some units. Publicly announced first-party games and projects will not be cancelled.
Minecraft developer Mojang and Candy Crush developer King will still stay within Microsoft and report directly to the CEO.
Other changes announced include streamlining production through reducing management layers to between three and five, establishing the role of Chief Operating Officer, and more.
Sharma said the company was "not healthy" and is operating at margins of up to 10 times lower than other companies in the industry.
The company teased the next Xbox console under the code name "Project Helix" in March. Sharma stated that the "next generation console" will play both Xbox and PC games.
