Microsoft has once again announced a new set of layoffs across the company.
As reported by CNBC, Microsoft explained that the objective of these layoffs would be to reduce layers of middle management within the company. There will be layoffs of 6,000 employees, representing 3 percent of their total workforce at this time. Microsoft shared this statement:
We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace.
Microsoft already had layoffs last January, affecting less than 1 % of all total employees at that time. Microsoft explained that the January layoffs were based on finding the lowest performers, and these new layoffs are unrelated.
As shared by People Matters Global, rumors about these new layoffs were going around since two weeks ago.
Fans may unhappily remember that Microsoft already implemented major layoffs across the game studios under Bethesda and Activision Blizzard King shortly after they closed their acquisition deal. While it’s possible that these 2025 layoffs will affect people in Microsoft Gaming, it isn’t clear how many more game developers will be laid off.
While we are at the third wave of layoffs in the video game industry, we should recognize that the situation has rapidly changed in a matter of weeks, because of the sudden changes to US tariffs. We should not be surprised if Sony’s PlayStation division headquartered in California, Nintendo of America, EA, Take-Two Interactive, and other video game companies also announce more layoffs or projects being cancelled or scaled down in the coming months.
But Microsoft is making a point of disclosing the reasons for these layoffs. While some observers would take this for granted, that transparency matters to the public just as much as it does to investors. It’s a lot more transparent than how some other game companies went about their layoffs and studio closures in the past three years.
If there will be an impact to Microsoft’s game studios, we will find out in the coming months. There would be a limit to how many such layoffs Microsoft can do before they have to cancel upcoming games, which themselves are necessary to maintain their various businesses such as Xbox and Game Pass. Theoretically, Phil Spencer’s carefully laid plans from as far back as the Xbox One era would have been calculated to avoid Microsoft’s Gaming division from being shuttered. In these trying times, we’ll find out how successful Spencer’s plans will turn out.
