Microsoft’s layoffs have extended into Xbox, according to internal memos. The cuts of 4% of the company’s staff are affecting the gaming divisions, including Xbox. As a result of these layoffs, Xbox has canceled the upcoming Perfect Dark game and is planning to shutter developer The Initiative. Xbox’s leadership didn’t specify how many employees are being laid off, but that studio leadership would share more details soon.
Xbox’s Matt Booty confirmed the layoffs in an internal memo, saying, “These decisions, along with other changes across our teams, reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape. We did not make these choices lightly, as each project and team represent years of effort, imagination, and commitment.”
While Xbox has not shared which studios (other than the Initiative) have been affected, reports trickle in with numbers. Bloomberg’s Jason Schreier reports that Call of Duty studios, such as Raven Software, have had layoffs, and Forza Motorsport developer Turn 10 have been hit especially hard with “nearly 50%” of staff being cut. He also reports that King, the Candy Crush studio, is losing 10% of staff, or about 200 people. Insider Gaming corroborates layoffs at Raven, and also adds that Sledgehammer is facing cuts as well.
Microsoft confirmed as well that it would be laying off around 9,000 employees across the entire company, which represents about 4% of staff. The company previously announced around 6,000 layoffs, or 3% of staff, in May. Xbox head Phil Spencer said in an internal email that the layoffs will “follow Microsoft’s lead in removing layers of management to increase agility and effectiveness.” This language echoes the language of Microsoft CFO Amy Hood, who said in the third quarter earnings call that the goal was, “increasing our agility by reducing layers with fewer managers.”
Further studio closures at Xbox
Besides Perfect Dark, Xbox has also canceled Everwild, Rare’s action-adventure game first announced in 2019. According to the memo, Xbox has also decided to “wind down several unannounced projects across our portfolio.” Windows Central reports that one of those projects was Blackbird, a new MMORPG from ZeniMax Online. Sources told the publication that ZeniMax’s London-based marketing team have also been affected.
Spencer’s memo tells the employees who have been laid off to apply for other open positions within Xbox: “Employees whose roles were eliminated are encouraged to explore open positions across Microsoft Gaming, where their applications will be given priority review.”
A Microsoft spokesperson told GamesBeat, “We continue to implement organizational and workforce changes that are necessary to position the company and teams for success in a dynamic marketplace.”
The Initiative is the latest of several Xbox studios shut down, with Tango Gameworks, Arkane Austin, Roundhouse Studios and Alpha Dog Games having been affected in a mass closure last year. According to VGC, two key figures from Rare are departing following Everwild’s cancelation: Game designer Gregg Mayles and executive producer Louise O’Connor.
