In a surprise revelation, Microsoft has laid off a few hundred employees, including people at Team Xbox.
Less than 1,000 staff were released, and it’s been reported that these layoffs happened across the company. In an interview with Business Insider, Microsoft released this statement on the releases:
“Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly.
We will continue to invest in our business and hire in key growth areas in the year ahead.”
Among those affected were Microsoft’s Studio Alpha, a spinoff of their gaming division which leverages their gaming and cloud technology to create AI and simulation technology for wargaming, in a military context. Studio Alpha was working with the US Marines, but it is expected that the entire studio will be closed.
Studio Alpha’s principal architect Greg Chapman actually tweeted that his entire team was laid off:
“Today me and my entire team were laid off. 12 years here at Microsoft, and 25 in game development. Details shortly once the shock wears off.”
Microsoft’s Mission Engineering team, whose focus is space technology, also seems to be preparing for closure. Employees received an email that they would be ‘deprioritising work’, team leaders would be wrapping up said work to ‘determine next steps.’ It’s not clear that this division will have any layoffs, so much as the employees will be retained somewhere.
It may be the case that Microsoft’s focus here is not the layoffs themselves, but streamlining their operations. Unfortunately, the company already made a prior announcement that they have plans to fire 1 % of their workforce, or about 18,000 employees. It isn’t clear if this round of layoffs is part of that plan or not.
This news comes while Microsoft is still trying to finalize their acquisition of Activision Blizzard. The two companies have finalized the fine details of the deal themselves, but regulators in UK, Europe, and US are reviewing the deal if the massive scale of the deal will create issues within the video game industry. This has also led to an extended word war in public and with regulators between Microsoft and their primary competitor Sony.
But aside from that, there was no sign of any particular financial issues with Microsoft or its gaming division. We are a few days away from the company’s next quarterly report, but in their last quarterly report last April, the company reported they had the best non-holiday quarter for Xbox revenue.
To be clear, these layoffs do not seem to be happening due to the company having issues with profitability. Microsoft’s statement also confirms this. It may be the case that in the face of their pending acquisition of Activision Blizzard, that the company has decided to review all their divisions and projects, to figure out what kind of company it will be moving forward.
Source: GamesIndustry, Videogameschronicle
