Microsoft Gaming Division Faces Massive Layoffs and Project Cancellations in 2024

Microsoft's Gaming Division Hit by Major Layoffs and Project Cancellations in 2024 In a significant restructuring shake-up, Microsoft has announced substantial layoffs across its entire workforce, with a pronounced impact on its gaming division.

These developments mark one of the most notable waves of job reductions in the video game industry this year, affecting key studios and long-anticipated projects across platforms including Xbox. According to a recent report from Variety, Microsoft aimed to reduce its global workforce by approximately 4%, which translates to around 9,000 jobs across various divisions.

Bloomberg’s Jason Schreier independently confirmed that the reductions are heavily impacting Microsoft’s gaming subsidiaries, although specific exit numbers for the affected gaming personnel have not been officially disclosed at this time. Major Layoffs and Project Cancellations Across Studios Among the layoffs, King, the well-known Activision subsidiary behind the highly successful Candy Crush franchise, is said to be cutting 10% of its staff.

This equates to roughly 200 employees departing the mobile game studio, affecting its creative and operational teams. Additional consequences of the reshuffle include the cancellation of significant projects and the shuttering of entire studios: - ZeniMax Online Studios, an important player in the MMO space under Microsoft's gaming umbrella, has scrapped its MMORPG known as 'Blackbird.' Concurrently, long-serving President Matt Firor is stepping down from his role. - Rare, the British studio famous for classics such as Banjo-Kazooie and Sea of Thieves, has faced the cancellation of its heavily anticipated new IP, Everwild.

The game had been in development for approximately a decade, representing a significant loss for both the studio and its fanbase. - The Initiative, a studio based in Santa Monica and previously working on the highly discussed Perfect Dark reboot, has been closed.

As a result, the planned revival of the Perfect Dark franchise has also been halted. Leadership Response and Rationale Xbox Head Phil Spencer addressed the layoffs in an internal communication to staff, emphasizing that the decision was made to 'increase agility and effectiveness.' Spencer went on to explain that the changes are designed to allow the division to prioritize 'the strongest opportunities' in an evolving industry landscape.

He described the shift as a move toward a more focused approach, aiming to better align resources with Microsoft Gaming’s long-term goals.

Spencer’s full statement was initially referenced in a report by Windows Central. Broader Industry Implications This wave of layoffs and cancellations highlights ongoing volatility within the gaming sector, even among leading publishers and hardware platforms such as Xbox.

It also reflects the challenges large organizations face in balancing innovation, long-term project viability, and operational efficiency. While the future of projects like Everwild and the Perfect Dark reboot remains uncertain, Microsoft’s actions send a clear signal about the company’s commitment to streamlining operations and investing behind its most promising titles and studios.

As the restructuring unfolds, observers across the industry will be watching closely to see how these changes influence the broader landscape of game development and publishing. Stay tuned for further updates as more information becomes available regarding affected employees, studios, and the evolving strategy for Microsoft’s gaming division.

Rare Activision Microsoft Xbox Microsoft Gaming King ZeniMax Online Studios The Initiative Phil Spencer Jason Schreier Bloomberg Windows Central