Microsoft lays off 9,000 people, including many at Xbox

Microsoft is laying off 9,000 employees across various divisions worldwide.

In a press statement, the company said it’s implementing “organizational changes necessary to best position the company and teams for success in a dynamic marketplace.”

While it’s unclear exactly how many jobs have been cut in specific departments, the company’s Xbox gaming division has been hit particularly hard. Over the past few hours, we’ve learned that nearly 50 percent of acclaimed Forza Motorsport developer Turn 10 has been let go, while King (Candy Crush) has lost about 10 percent (or 200 people) of its workforce.

On top of that, The Initiative, the developer behind Xbox’s Perfect Dark, has been shuttered and the game itself has been cancelled. Xbox formed the studio in 2018 to make a new “AAAA” single-player game but closed it before it could ever release a single title.

Elsewhere, Xbox has cancelled Everwild, the long-gestating new fantasy IP from Rare (Sea of Thieves) and an upcoming multiplayer game from Zenimax Online Studios (The Elder Scrolls Online).

What’s made all of this even worse is the news has been coming out sporadically, with media like Bloomberg‘s Jason Schreier or Windows Central reporting on the layoffs and cancellations throughout Wednesday, often before employees themselves even found out.

It should be noted that Xbox has multiple studios in Canada, including Vancouver-based The Coalition (Gears of War), Montreal’s Compulsion Games (South of Midnight) and Quebec City’s Beenox (Call of Duty). When asked whether any Canadian employees have been affected, a representative for Xbox Canada declined to comment on specifics “out of respect” for employees.

Instead, they reiterated the above comment about implementing “organizational changes necessary to best position the company and teams for success in a dynamic marketplace.” On top of that, they noted that the overall impact of the reductions represents less than four percent of Microsoft’s global workforce and that they span different job levels, teams, geographies and tenure.

All of this comes just two months after Microsoft axed 6,000 jobs worldwide, a three per cent reduction in its workforce. It also laid off 10,000 employees in 2023.

This is in spite of the fact that the company reported nearly US$26 billion (about C$35.3 billion) in net income in the March quarter, well ahead of Wall Street’s expectations. As CNBC notes, this helped Microsoft continue to be one of the most profitable companies on the stock market performance tracker S&P 500 index, according to data compiled by FactSet.

“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,” wrote Microsoft CEO of Gaming Phil Spencer in an internal memo.

Microsoft’s gaming division has been facing increased pressure to cut costs following the company’s $69 billion acquisition of Call of Duty maker Activision Blizzard in October 2023. This has included thousands of employees across its various gaming studios, including the closure of Hi-Fi Rush maker Tango Gameworks (which was subsequently acquired by South Korean publisher Krafton) and Arkane Austin (Dishonored).

All the while, Microsoft CEO Satya Nadella earned nearly US$80 million/C$108.7 million last year, and that’s to say nothing of how much other executives like Spencer are taking home.

Update: 02/07/2025 at 5:56 p.m. ET — Updated with a response from Xbox Canada.