In a shocking turn of events, tech giant Microsoft has announced a series of layoffs that will affect 10,000 workers, some of whom are within its game studios. According to a Bloomberg report, at least 878 positions in Microsoft’s Washington location have been cut. This news comes on the heels of rumours that had been circulating earlier this week from Sky News, which had predicted that the company would be making significant cuts to its workforce.
The reason for these layoffs is being blamed on slowing e-commerce sales and a potential economic recession. Microsoft CEO Satya Nadella has stated that the company began notifying affected employees today, and plans to finish laying off the full 10,000 by Q3 of this year. This news has sent shockwaves through the gaming industry, as many prominent game developers and studios are among those who will be impacted by these layoffs.
Kotaku has confirmed that a number of developers at 343 Industries, The Coalition, and Bethesda Game Studios are being laid off. These studios have been hard at work on some of the most highly-anticipated games of the year, including Halo Infinite, the latest entry in the long-running sci-fi FPS series, Starfield, the upcoming space-faring epic, and Gears of War, one of the most popular franchises in gaming history. It remains to be seen how these projects will be affected in the wake of these layoffs.
In a blog post yesterday, Nadella attempted to spin the layoffs in a positive light, noting that the 10,000 cut jobs represent less than five percent of the total workforce. He claimed that the company will invest in “secular growth and long-term competitiveness” while providing support to folks impacted by the layoffs. The CEO also added that because customers “[optimized] their digital spend to do more with less,” some workforce reduction was necessary to align company cost and revenue with customer demands. However, he did mention that Microsoft still plans to “hire in key strategic areas.”
When asked for comment, Microsoft pointed Kotaku to Nadella’s statement. This round of Microsoft layoffs come a year after the company announced its plan to buy Activision Blizzard for $70 billion. The deal hasn’t been smooth sailing, however, with a number of governmental agencies, including the EU and the FTC, objecting to the proposed acquisition. Players aren’t happy about the corporate consolidation either, with one group looking to sue Microsoft for what they call anti-competitive practices.
These layoffs are a harsh reminder that even the biggest and most successful companies in the world are not immune to the effects of a struggling economy. The gaming industry, in particular, has been hit hard by the current situation, and it remains to be seen how these layoffs will impact the future of gaming. In the meantime, our thoughts and support go out to those who have been affected by these layoffs.
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