It’s a pretty rough time to be Microsoft. It’s an even worse time to be employed at the company — or worse yet, Xbox. On Monday, the company announced plans to cull 4,800 employees — or approximately 2.1% of its global workforce — with 3,200 being Xbox workers. Of those, 1,600 are basically gone. ‘Rough’ is an understatement.
As it turns out, throwing billions of dollars at the gaming division and holding thumbs isn’t enough to make it competitive. You have to actually make good games, and not stuff AI into every nook and cranny of the products. That deep way of thinking will be a comfort, we’re sure, to the thousands of employees who will be fired this year.
Tough going for Xbox
Those cuts will take place across several companies. Heads will roll at Activision, Bethesda/ZeniMax, Blizzard, King, Mojang and Xbox Game Studios over the coming year. Xbox will also divest up to five companies, though company head Asha Sharma only confirmed four: Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs. Those first two are lucky enough to go independent and hang onto their IP.
Compulsion Games and Double Fine Productions will return to management and transition to independent studios with their IP, catalog, and runway for their next games,” Asha wrote. “Ninja Theory and Undead Labs have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3.”
Arkane, the developer that may or may not be making a Blade game, is “beginning required consultation with its Works Council to review potential strategic options.” According to The Game Business, 350 of the employees on the chopping block stem from these companies, though exactly how many at each company is still unknown.
Read More: Sony PlayStation will cease physical game disc releases by 2028
No “first party publicly announced” games are currently in danger in light of the layoffs, according to Sharma. We’ve heard that one before. We’ll believe it when we see the games land on shelves, though if Sony gets its way… that may not happen. Sharma is, however, shifting priorities in an attempt to steer Xbox in the right direction.
As the companies under Xbox’s wing with the most monthly active players, Sharma is placing a keener eye on Mojang and King. What that’ll look like for the future of Minecraft and Candy Crush is still unclear.
Perhaps the biggest step toward getting Xbox back to its former glory is by cutting the ‘management layers’. Sharma reckons that work is passed between 14 of those layers in some parts of the company. “That complexity has slowed decisions, blurred accountability, and made it harder to deliver for players.”
In the future, Sharma hopes to scale that number back dramatically. There won’t ever be more than five management layers in play. Three, though, is the sweet spot for the company looking ahead. “We will streamline how we work across our tools, with a cleaner code base, shared services, and 50% reduced vendor spend.”
