Microsoft is laying off 650 employees at Xbox as the tech giant overhauls its business a few months after it bought video game maker Activision Blizzard. The layoffs, which are about 3% of Microsoft’s gaming staff, are expected especially after Microsoft bought Activision Blizzard in the $68.7 billion deal.
The cuts mainly include marketing, human resources, and other support positions in numerous Xbox studios and publishing groups. Microsoft has said that the layoffs are not related to current or future business performance or the success of the games business at Microsoft.
Microsoft Gaming’s CEO Phil Spencer spoke to his workers about the dismissals in a memo in which he offered apologies to the workers fired, but still noted the importance of improving the company’s efficiency. Spencer said: “These are hard decisions but important for our long term in the competitive video game industry.” We continue to be true to our vision of making games enjoyable for every soul on earth,” He said.
The dismissals have raised concerns among gamers and some industry pundits asking if it would affect the kind of and number of games coming to Xbox in the future. Nevertheless, the management of Microsoft has said that the key teams entailed in the development of video games are still valued and that the company continues to strive for the delivery of quality games to its customers.
The reorganization is taking place in the atmosphere of growing concern over labor relations and employment in the gaming sector. There has been an upsurge of efforts by game developers to form a union mainly because of some of the following issues affecting them presently which include; These dismissals at Microsoft could keep such talks active and even spur the creation of more unions in the affected industry.
However, Microsoft insists on a positive outlook of its gaming sector even after shedding employee numbers. The company has laid out a detailed blue print of how it intends to harness the opportunities of Xbox and Activision Blizzard into a broader more inclusive gaming market. This includes bringing in major Activision Blizzard IP’s under the Xbox Game Pass subscription service as well as working on new cloud based gaming solutions.
The acquisition of Activision Blizzard has put Microsoft right as one of the major market players offering the largest IPs, if not the largest, that includes CoD, WoW, and Minecraft and others. The company wants to leverage this larger roster of IP assets to better compete with rivals such as Sony and Nintendo and new entrants into the cloud-gaming space.
Many people are keenly observing how Microsoft will approach the acquisition of Activision Blizzard along with various possible issues with different corporate cultures. Circulating around Activision Blizzard there has been an increasing number of complaints of harassment and discrimination in the workplace, thus there is a necessity for the company’s change. Microsoft has since committed to fix these problems and make their workplaces more welcoming throughout their entire gaming business.
The cut its workforce at Xbox follows other major companies that have recently announced measures to trim down their number of employees due to changing market conditions and uncertain business environment. But in general, the segment of gaming has been traditionally more stable compared to other IT segments mainly due to people’s demand for home entertainment in conditions of the world pandemic.
Going forward in Microsoft’s reformed gaming section, the company is at great odds again facing the task of having to run efficiently while also having to be inventive at the same time. This strategy will work successfully and probably it would pave way for different other giants of the gaming industry to change the way they structure there mergers, acquisitions and so on in the future.
Microsoft says the affected employees will be let go with personal severance packages and employment relocation assistance. It has also said it will also remain committed to gaming, even though it is now a relatively small part of its overall business, as it seeks to add to development resources and look for new technologies including virtual and augmented reality.
Once the dust has finally settled from this round of layoffs as well, people will look at Microsoft for them to see how they use their newly acquired gaming behemoth to arrange a new entertainment experience. The next months and years will decide whether the risky steps Microsoft took in the gaming sector are worth it for the company and for all the gamers who use the company’s platforms and services.
