Microsoft has announced a massive new round of layoffs in its Xbox division, cutting 3,200 jobs over the next twelve months. The reduction, which immediately affects 1,600 employees, spans Activision, Bethesda, Blizzard, King, Mojang, and Xbox Game Studios. The decision follows the close of its fiscal year in June and is part of a restructuring plan aimed at improving profitability. Xbox CEO Asha Sharma communicated the news in an internal memo, stating the division's financial situation is "not healthy" and revealing operating margins 3 to 10 times lower than competing platforms.
Alongside the layoffs, four studios are moving to new ownership. Compulsion Games (South of Midnight) and Double Fine Productions will become independent again, retaining their IP and catalog. Ninja Theory and Undead Labs will transfer to new owners, with funding secured to complete current projects like Senua and State of Decay 3. Arkane Studios, initially at risk of closure, remains in consultation with its works council to evaluate strategic options.
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Content portfolio reset and efficiency drive
Sharma explained that Xbox intends to focus on higher-priority projects, reducing organizational complexity. "Since 2018, we have aggressively expanded our studio portfolio, but the number of games created each month now outpaces the last ten years combined. It is neither possible nor desirable to own every successful independent studio," she said. The division lost an average of 64 cents for every dollar invested. Going forward, Xbox will help independent creators through open tools and platforms rather than acquisitions. Mojang and King will now report directly to Sharma, flattening the hierarchy. Dave McCarthy, the outgoing COO, will be replaced by Helen Chiang, a veteran of the Minecraft leadership team, who will oversee content, hardware, platform, and services with full profit and loss responsibility.
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This restructuring follows a recent price increase for Xbox consoles, attributed to rising memory and storage costs. Xbox had already cut 1,600 jobs in early 2024 and hundreds more a year ago. The Communications Workers of America union urged Microsoft to negotiate meaningful layoff protections for affected workers.
For broader context on streaming strategies, see Apple's free 4K upgrades on iTunes. The digital shift also impacts the auto industry: Bentley unveiled its first electric vehicle. For a distraction-free experience, here's how to turn an iPhone into a dumb phone.
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Source: https://www.engadget.com/2208480/xbox-confirms-plans-to-lay-off-3200-workers-over-the-next-year
