Microsoft Announces Major Layoffs Impacting Over 9,000 Employees Across Gaming and Tech Divisions

Microsoft has begun another substantial round of layoffs, notifying staff across multiple divisions that more than 9,000 employees will be affected in this latest workforce reduction.

This move marks the second significant wave of job cuts at Microsoft within 2024—a decision that has impacts reaching beyond the gaming sector and into broader technology operations. According to a report published by Bloomberg journalist Jason Schreier, prominent studios such as King, the developer of the hit mobile game Candy Crush, are facing sizeable layoffs, with approximately 200 employees – representing around 10% of their workforce – being let go.

ZeniMax Media, the parent company of esteemed developer Bethesda, is also among the notable studios experiencing staff reductions.

Employees spoke to Bloomberg under the condition of anonymity, stating they were not authorized to discuss the layoffs with the media.

Additional U.S.-based teams are expected to receive similar notifications throughout the day, extending these cuts beyond Microsoft’s gaming division. This restructuring comes in spite of Microsoft’s robust financial performance.

As reported by CNBC, the technology giant recorded $26 billion in net income on revenues totaling $70 billion for the first quarter of the year.

This makes Microsoft one of the S&P 500’s most profitable companies, underscoring the scale and potential impact of the ongoing changes. Phil Spencer, CEO of Microsoft Gaming, addressed staff in an internal memo detailing the company’s direction.

He explained that the layoffs and organizational shifts are aimed at ensuring long-term success and allowing Microsoft to focus on key strategic growth areas.

"To secure lasting success within Gaming, we are adjusting our organizational structure, ending or reducing work in select areas, and streamlining layers of management to improve agility and effectiveness.

Details about specific changes will be communicated by team leaders in the coming days," Spencer stated in the memo shared by IGN. Spencer also acknowledged the timing of these tough decisions, noting, "At a time when engagement is high and our platforms, hardware, and game pipeline have never been stronger, these steps reflect a commitment to prioritizing our greatest opportunities for growth.

Our aim is to protect thriving projects and focus resources on areas with the highest potential, ensuring we continue to deliver outstanding games and experiences to players in the years ahead." He further emphasized that the layoffs were not reflective of the impacted employees’ talent or dedication and that their contributions were instrumental to Microsoft's momentum.

The company is offering severance packages, healthcare coverage, and job placement resources as part of the transition, encouraging affected staff to consider other roles within Microsoft Gaming for which they will receive priority consideration. The changes at Microsoft demonstrate both the challenges and shifts continuing to shape the video game and broader technology industries, even against a backdrop of record-setting revenues and user engagement figures.

As this breaking story develops, further updates will follow as more information becomes available. Sources: Bloomberg, IGN, CNBC

Microsoft King ZeniMax Media Bethesda Phil Spencer Bloomberg IGN CNBC