Microsoft (MSFT, Financial) has initiated another major round of layoffs, significantly impacting its Xbox gaming division. This move is part of a global restructuring effort aimed at reducing costs and streamlining operations. Reports indicate that several gaming studios in Europe, including Candy Crush developer King and ZeniMax Online Studios, have started layoffs. King plans to cut around 10% of its workforce, approximately 200 employees, while ZeniMax and other studios have been similarly affected.
In addition to the layoffs, Microsoft has terminated several long-term game development projects, including Rare Studio's Everwild and an original multiplayer game from ZeniMax Online. These cancellations have necessitated further staff reductions within the affected studios. The current layoffs coincide with Microsoft's broader plan to cut approximately 9,000 employees company-wide, following a previous reduction of 6,000 positions in May.
Phil Spencer, CEO of the gaming division, emphasized the need to focus on strategic growth areas to remain competitive. Despite the difficult decisions, he remains confident in the development of the platform, hardware, and game product lines. Impacted employees will be given priority for other open positions within the company. The Xbox team has faced four major layoffs in the last 18 months, highlighting ongoing pressures to improve profitability following Microsoft's $69 billion acquisition of Activision Blizzard.
