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Serious Growth Concerns led to Mass Layoffs: Xbox

Microsoft has announced plans to cut 8% of employees in its gaming division. Microsoft’s chief of gaming has stated that the company’s decision to remove 1,900 jobs was primarily due to a lack of industry growth. In January, Microsoft laid off approximately 8% of its 22,000 employees across Xbox, Bethesda, and Activision Blizzard.

In October 2023, the business acquired Activision Blizzard, including franchises such as Call of Duty, World of Warcraft, Diablo, and Overwatch.

Spencer announced job layoffs in a note to staff, stating that Microsoft and Activision’s leadership teams “set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth.”Spencer discussed layoffs in an interview with Polygon, citing a lack of industry development as the reason for cost cuts among publicly traded companies.

Farhan Noor, a game developer who has been tracking job cutbacks on since 2022, thinks that approximately 10,500 games industry employees were laid off last year. And less than four months into 2024, approximately 8,000 anticipated job layoffs are believed to have been confirmed.

“I’ll say the thing that has me most concerned for the industry is the lack of growth,” Spencer went on to explain. “And when you have an industry that is expected to be smaller next year in terms of players and dollars, and you have a lot of publicly traded companies in the industry that have to show their investors growth — because why else would someone own a share of someone’s stock if it isn’t going to grow? — the cost side of the business is scrutinized. Because if you don’t increase sales, the cost side will suffer.

“We’re a business,” he added. “I’ve stated it over and over. I don’t have the luxury of not needing to manage a profitable, growing firm inside Microsoft. We are that today. During my time at GDC, I was reminded of friends in the business who have been displaced and lost their jobs. I do not want this industry to be a place where people cannot confidently establish a career.

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