There have been a number of major layoffs across the global video game industry, including studio closures and even project cancellations, due to a slow recovery in player spending after peak participation rates during the pandemic.
Xbox chief Phil Spencer made it clear in an internal memo to employees that the cuts will primarily affect support and business positions, and will not impact game development, devices, or user experience.
American technology corporation Microsoft also confirmed that current projects will not be affected and none of its studios will be closed.
It is known that this cut comes in the context of Microsoft facing many challenges after a series of large-scale acquisitions, especially the $69 billion Activision Blizzard deal.
On the other hand, Xbox Series X/S sales have fallen short of expectations, and the Game Pass service is also struggling, forcing Microsoft to raise prices.
In early 2024, Microsoft announced plans to lay off about 1,900 gaming employees from its Activision Blizzard and Xbox divisions. By May 2024, several of its game studios had also been closed, including Arkane Austin.
Market research firm Newzoo also cut its annual growth forecast for the global video game market in August 2024 due to weaker-than-expected console sales amid a relatively small game release schedule this year.
