Key Takeaways
1. Microsoft is laying off approximately 9,000 employees, representing nearly 4% of its global workforce, to simplify its structure for fiscal year 2026.
2. The gaming division, especially the King division known for Candy Crush, is significantly impacted, with about 200 job cuts (10% of its workforce).
3. This is the fourth round of layoffs in the Xbox division over the past 18 months, following previous cuts totaling around 10,000 jobs in 2023.
4. The layoffs are part of Microsoft’s strategy to adapt to a changing market and to prioritize the best opportunities for future success.
5. Microsoft aims to streamline its management structure by reducing layers between executives and employees.
Microsoft has decided to lay off around 9000 staff members, impacting nearly 4% of its total global workforce across different teams and locations. This decision represents another phase of layoffs as the company seeks to simplify its structure at the beginning of its fiscal year for 2026. The software giant from Redmond usually makes organizational changes at the start of each fiscal cycle.
Company Statement
“We are continuing to execute the necessary organizational changes to position the company and teams for success in a changing market,” said a spokesperson for Microsoft.
Impact on Gaming Division
The gaming sector is one of the most significantly affected areas. According to Bloomberg, workers from Microsoft’s gaming division, including the Xbox team, were notified about the job cuts early Wednesday. Specifically, the King division, based in Stockholm and famous for the widely played game Candy Crush, is cutting about 10% of its workforce, which translates to around 200 jobs lost. Other layoffs have been confirmed in European gaming offices, with further announcements expected for U.S. divisions later today.
Phil Spencer, the CEO of Microsoft Gaming, addressed the layoffs through an email to employees, stating:
“I understand that these changes occur at a time when we have more players, games, and gaming hours than ever. Our platform, hardware, and game plans have never been more robust. The success we are currently experiencing is a result of difficult choices we’ve made in the past. We must make decisions now to ensure continued success in the coming years, and a crucial part of that strategy is the discipline to prioritize the best opportunities.”
Recent Layoff History
This is the fourth round of cuts in the Xbox division over the last 18 months. Last year, Microsoft cut nearly 2000 jobs in the gaming sector, including positions at Xbox and Activision Blizzard, and also shut down three ZeniMax game studios after acquiring them in 2021. These actions are part of Microsoft’s ongoing efforts to integrate following its $69 billion acquisition of Activision Blizzard in October 2023.
The latest layoffs come after several rounds of job reductions this year. Earlier, in January, Microsoft let go of less than 1% of its workforce based on performance assessments. In May, the company laid off over 6000 employees, followed by 300 more positions cut in June. By June 2024, Microsoft had around 228000 employees globally. In 2023 alone, the company had already decreased its workforce by 10000.
As with the layoffs in May, Microsoft aims to streamline its management structure by minimizing the layers between top executives and individual contributors.
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