Microsoft Lays Off Thousands of Xbox Employees, Closes Game Studios

Supported by Xbox Hits Reset Button, Laying Off Thousands and Dropping Game Studios The layoffs were part of wider cuts at Microsoft, as the company prioritizes spending on artificial intelligence. Microsoft said on Monday that it was making major changes to its Xbox video game business, dropping several game studios and cutting its Xbox work force by 20 percent. The company said it would lay off 1,600 Xbox employees now and cut another 1,250 roles over the next year. The initial Xbox layoffs are part of 4,800 job cuts that Microsoft announced on Monday, a total that accounts for roughly 2 percent of the company’s work force. It is Microsoft’s latest employee culling as it plows tens of billions of dollars into the infrastructure for building artificial intelligence. Microsoft executives acknowledged that the company had misread the economic challenges facing the video game industry. “Our platform teams are 40 percent larger than they were at the start of this generation, even as our player base and playtime have declined,” Asha Sharma, Xbox’s chief executive, wrote in a letter to employees. “As we reset Xbox, we will simplify.” While Xbox is responsible for about 6 percent of Microsoft’s revenue, the brand has been one of the largest and most influential forces in the video game industry since it entered the console wars with Nintendo and Sony in 2001. During the Covid-19 pandemic, video games became a crucial consumer business for Microsoft. But since then, the company’s overwhelming priority has been investing in A.I., while the video game division’s sales have dropped. Related Content Advertisement