Xbox Layoffs Begin With 200+ Cuts In Europe – Report

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Xbox’s hardships persist, with Microsoft announcing further reductions in its Xbox workforce. Interestingly, this occurs amidst rising Microsoft shares and increasing earnings.

It’s been confirmed that Microsoft plans to reduce approximately 4% of its global workforce, which amounts to about 9,000 employees. This reduction will affect staff members at Xbox as well. A Microsoft representative stated, “We are making organizational and workforce adjustments to best position our company and teams for success in a rapidly evolving marketplace.

Based on reports from Bloomberg, the mobile game development company owned by Microsoft, King (located in Barcelona), is planning to reduce its workforce by 10%. This equates to approximately 200 people who work at the studio responsible for Candy Crush. Additionally, job reductions are also expected at ZeniMax’s European offices.

In a memo sent to employees today, Phil Spencer, CEO of Microsoft’s Gaming division, explained that recent layoffs were essential for the long-term prosperity and continued achievement of Xbox.

He stated that we plan to scale back or minimize our operations in specific sectors of the company, while adopting a management structure similar to Microsoft’s, which eliminates multiple management levels, to boost flexibility and efficiency.

Spencer acknowledged that the reductions are occurring at a period when Xbox’s business is thriving. In his words, “I understand that these adjustments are taking place during a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game plans have never been stronger.

Today’s success of Xbox can be attributed to the challenging choices Microsoft made in the past, as stated by Spencer.

In order to ensure long-term success, it’s crucial that we make decisions now focusing on our strongest prospects. A vital aspect of this plan is maintaining the self-control needed to prioritize opportunities with the most potential. We will safeguard what is flourishing and invest our efforts in areas with the maximum growth potential, all while meeting the company’s expectations for our performance. By adopting a strategic focus, we can create exceptional games and experiences that players will enjoy for many years to come.

Over the last few years, Xbox has experienced recurring reductions in workforce. Following Microsoft’s acquisition of Activision Blizzard, approximately 1,900 employees were let go. This was followed by more than 650 layoffs. In May 2024, Microsoft shut down four studios it acquired when it bought ZeniMax: Arkane Austin, Tango Gameworks, Alpha Dog Games, and Roundhouse Games.

It’s thought that some of the job cuts and studio shutdowns at Xbox are linked to a broader cost reduction strategy being implemented by Microsoft, which has led to numerous layoffs totaling thousands of employees across the company over the last two years.

Previously, Microsoft’s Gaming CEO, Phil Spencer, stated that reducing the Xbox workforce was necessary for the company to operate in a financially viable manner long-term. However, the response from Sarah Bond, Xbox president, about these layoffs, did not sit well with many.

Despite Microsoft experiencing prosperous periods, marked by a 13% increase in quarterly net revenue to $70.1 billion and a 18% rise in net profit to $25.8 billion, the company has recently announced job cuts. Interestingly, the Xbox division has shown growth in year-over-year revenue, while Microsoft’s stock price has climbed by approximately 150% over the past five years.

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2025-07-02 16:39