Xbox hit hard with layoffs: from canceled games to a shuttered studio

Microsoft confirmed that it’s laying off as many as 9,100 employees, or about 4 percent of its workforce, in yet another round of cuts this year, reports The Seattle Times. Employees in Microsoft’s Xbox division, known as Microsoft Gaming, are being hit hard by these layoffs, although exact numbers and divisions are not yet known.

Xbox leader Phil Spencer said in a message to the team, “To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness.”

In July, Microsoft’s sweeping layoffs hit Xbox hard, and shuttered the entire game studio that was building Perfect Dark. Officially, the game was canceled. But unofficially, reports Bloomberg’s Jason Schreier, Microsoft gave Perfect Dark’s other set of developers — Tomb Raider studio Crystal Dynamics — a chance to revive the game.

Here’s where it gets potentially confusing: Microsoft doesn’t own Crystal Dynamics — that studio belongs to the Embracer Group, which has had many troubles of its own. So Embracer was trying to cut a deal with yet another publisher, the giant Take-Two, to buy, fund, and publish the game. But, Schreier reports:

The sweeping layoffs announced by Microsoft this week have been especially hard on its gaming studios, but one executive producer at Xbox has a solution to “help reduce the emotional and cognitive load that comes with job loss”: seek advice from AI chatbots.

In a now-deleted LinkedIn post captured by Aftermath, Xbox Game Studios’ Matt Turnbull said that he would be “remiss in not trying to offer the best advice I can under the circumstances.” The circumstances here being a slew of game cancellations, services being shuttered, studio closures, and job cuts across key Xbox divisions as Microsoft lays off as many as 9,100 employees across the company.

Microsoft’s layoff of roughly 9,000 employees is continuing to have downstream effects at the company’s subsidiaries. Aftermath reports that as many as 100 developers at Blizzard have been impacted, and as a result the studio is winding down development on its mobile tower defense game Warcraft Rumble.

In an announcement, Blizzard wrote that while the game will not be abandoned entirely, the company will cease development on any new content. “Moving forward, we’ll continue supporting Rumble with updates focused on regular, systemic in-game events and bug fixes, but no new content. ”

Microsoft says that Phil Spencer, Microsoft Gaming CEO and the head of Xbox, isn’t retiring “anytime soon.” The company has responded to rumors of Spencer’s retirement, which have spread online today following Microsoft’s major layoffs.

“Phil is not retiring anytime soon,” says Kari Perez, head of Xbox communications, in a statement to The Verge. The denial comes after Call of Duty leaker GhostOfHope claimed “Phil Spencer will be retiring from his role as CEO of Microsoft Gaming after the launch of the next generation Xbox” and that Xbox president Sarah Bond would be taking over as CEO of Microsoft Gaming.

Microsoft is canceling its Perfect Dark and Everwild games as part of sweeping cuts to its Xbox division. Matt Booty, Xbox president of game content and studios, revealed that Microsoft will be closing The Initiative, the studio behind Perfect Dark, in an internal memo to Xbox employees today.

The cuts are part of layoffs affecting around 9,000 employees across Microsoft, with Turn 10 Studios, the developer behind Forza Motorsport, also hit hard by today’s layoffs.

Microsoft announced layoffs today affecting as many as 9,000 employees, and as part of the changes, more than 70 people will be let go at Forza Motorsport developer Turn 10 Studios, according to a source familiar with the situation.

The cuts were made on a call with Microsoft HR representatives this morning, and are hitting the “vast majority” of the studio. One source described the layoffs as leaving enough people behind to keep Forza Motorsport up and running.