Microsoft said it's laying off 650 employees in its Xbox unit. This marks the third round of layoffs this year as the company attempts to control costs and integrate its US$69-billion acquisition of Activision Blizzard, Bloomberg News reported on Thursday. The game industry at large as seen a huge layoffs, studio shutdown and project cancellation in the first half of 2024. All these are caused by sluggish recovery in gamer spending after player engagement rates reached their peak during the pandemic.
However, according to the report, this Microsoft-Xbox's recent layoffs will impact corporate and supporting functions the most. This was also seen on a memo sent to staff by Xbox chief Phil Spencer. Meanwhile, do note that despite the job cuts, the company has no plans to cancel any games, projects or close any Xbox's studio.
Recall that in January, Microsoft made it clear that it would let go of 1 900 employees at Activision Blizzard and Xbox. Also, in May, Xbox shut down a number of gaming studios, including Arkane Austin.
These layoffs are part of the company's plan its highlighted in January to let go of 1 900 employees at Activision Blizzard and Xbox. Also note that Microsoft completed its acquisition of Activision Blizzard last year. This has helped the company to strengthen its position in the video game industry. With this deal, Microsoft gained control over popular gaming titles like Call of Duty which enhance its ability to compete with Sony, a leading player in the Game market.
Last month, Newzoo, a research firm, reduced its forecast for the global video game market’s growth. This adjustment was due to two main factors: lower-than-anticipated sales of gaming consoles and a limited number of new game releases this year. The underperformance in console sales and the lack of exciting new games have contributed to the slower growth, prompting Newzoo to revise its earlier projections downward.
