Microsoft has reportedly initiated a number of layoffs across various divisions, including the Xbox team. According to a report by Business Insider, the internal shift amounts to "less than" 1,000 employee redundancies at Microsoft.
As mentioned, Xbox is apparently one of the divisions to suffer, alongside the Microsoft Strategic Missions and Technology organisation, along with others.
Microsoft provided this statement to the reporter when questioned:
"Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly. We will continue to invest in our business and hire in key growth areas in the year ahead."
The report doesn't go into detail on the Xbox side of things, so we don't have any specifics about how significantly the team has been affected. If we hear more, we'll let you know.
What are your thoughts on this? Let us know down in the comments section below.
[source businessinsider.com]
Comments 28
@Kaloudz Honestly no idea.
I'd be annoyed if i were a long term employee losing their job right now whilst they spend 70 billion on a whole bunch of devs for a division not making much profit.
Buying market share is ok if its money and you have it, its not ok if you are buying it with your current staffs lively hood.
Not that it surprises me, I've watched them do buisness since the mid seventies and I know they are very far away from being the nice guys of buisness often touted here.
The good thing is its only about 0.6% of their headcount, and not much of that would be from xbox, so its unlikely to affect anything much. Activision comes with another 10,000 employees though....
1: this is one of the reasons I hate this and many other companies. Do not lay off, especially right before the holidays and in cold weather!
Before Covid I worked at a tech company similar to Microsoft. 6 months of my training was shadowing other sections of my department learning about how it all fits together. It didn't take long to realize there are a lot of redundant or unnecessary jobs in these massive companies. People spending 8 hours a day going through data where a program no better than excel can do in less than a minute. It's not a pleasant thing but companies like Microsoft have to go through periodically and reevaluate where they are wasting resources.
@FraserG @Kaloudz @Titntin I believe ABK is over 15,000 in total but the figures may be a little out of date, likely more than that now.
For perspective Microsoft currently employs around 200,000 staff worldwide.
Business Insider and Bloomberg suggested some of this was pretty standard restructuring from failed projects including closing Studio Alpha which was developing some of their military gaming tech and war simulations and a restructuring of the HoloLens team. [EDIT] but was also fuelled by lower growth than expected.
To be honest this stuff is always happening behind the scenes and while less than 1% (more than a 100, less than 1,000 is reported) in one go is a lot, and doesn't help those being laid-off, Microsoft have also said they intend to increase total staff this year despite these lay-offs.
Just a reminder it's all just harsh business at the end of the day. No nice guys in this field.
But also, pretty standard move after failed initiatives evaluation.
@Kaloudz thats 2020 figures, 9,500 employees for activision blizzard total.
We know they can afford it, so its a little disconcerting to see main corp culling some heads, but eventually all this spend will need to see results.
I have a lot of time for some of the people who run xbox, even if Im critical of the main corp. The games devision seemed to have good autonomy 15 years back, and they were good people to work with. I hope the people I knew are ok! 😀
@themightyant
Oops sorry mate, my figures were direct from a simple google search that suggested 9,500 total employees, but im happy to get better researched facts.
Ditto Microsoft, the reports i read suggested they had 180k worldwide, but again, happy to have better figures.
I guess its a reletively small cull in the scheme of things, but im wandering if its a sign that head office might wanna start seeing some results? I hope not, im enjoying the freebies 😂
Big Xbox/Microsoft fan, but laying people off while fighting for the right to spaff 70bn on CoD (ok, all ActBlizz) doesn't look good or feel right.
They are in the business to make money. If you have fun with one of their games its mostly a byproduct in their eyes.
The key word here is "redundancies." They're not downsizing due to closing departments or dissolving positions. But when you have 100 people doing work that can effectively be done by 75, that's bad news for 25 of them. It's unfortunate but it happens. Also, "less than 1000" in a company as gigantic as MS is very little.
Friendly reminder that cutting redundant positions not only increases workload on those still present, but also makes it more difficult for them to take vacation, and generally increases penalties for being absent as there's not enough coverage.
Thankfully I was able to veto the last layoffs my previous company was trying to do.
Honestly with all the delays and long development period of games!!! I will swear most of the studios stuff is hiding in corners eating donuts or do nothing and get paid well
If sony did this you'd all be talking about how terrible they are.
This comes very quickly after everyone saying how profitable gamepass is ,not a good look lol
@Titntin no worries dude. I believe 9,500 is Activision only but the ‘Activision’ deal is for Activision Blizzard King (ABK), I’m led to believe there are around another 5000 staff at the other two.
None of the MS total staff figures are particularly firm, I’ve looked at 3 sources and they’re all different numbers, 180,000, 200,000 and 220,000 take your pick, they’re probably all wrong and outdated. Lol
As others have said it’s just businesses re-evaluating their departments and workforce roles, it’s common practice. I wouldn’t be surprised though if businesses around the globe are making redundancies due to Covid. If employees were working from home or off sick for a certain period of time, it might of made the companies realise that they were not missed and thus no longer needed. I’ve certainly heard of that happening.
The company I work for just did the same thing, a restructure where they removed redundant positions. For instance, instead of 2 teams of 4 with two managers we are now one team of 8 with one manager.
This is likely being taken out of context. I would bet that they removed mostly management positions as the ladder gets pretty gnarly at these big companies. Like why does my department alone have something like 12 vice presidents? We have vice presidents reporting to vice presidents, what the heck? Corporate offices can be a weird system.
@Kaloudz Yes the ABK numbers are ridiculously huge.
Note: Accurate staff numbers are hard to come by, they are fluid and not reported often, so take all figures below with a heavy pinch of salt. They are likely all wrong, but in the right sort of ballpark
For comparison other larger Xbox studios are:
So yes it's probably safe to say ABK has significantly more staff than all of Xbox Game Studios + Bethesda combined. That should gives you an idea of the scale of this deal why anti-competition authorities are looking at it so closely.
It's how Activision have been able to get out such a high quality release for COD. Every. Single. Year. They throw an unprecedented number of people at each title. Black Ops Cold war had around 5,000 credited devs, and likely some won't have been credited. Of course some are external contractors but it's still humongous. And unlike everyone else they release a game like this every single year by doing this three times over developing three games at a time.
While I disagree with Jim Ryan's recent methods and whining, there is a valid point in there somewhere that it's completely unrealistic for anyone else to try and compete with COD directly. It has a pretty unassailable position and a business model that no one with business sense would attempt to replicate quickly. Activision got in at the right time, grew over a long time period, and now have a very profitable cycle going. But the initial cost to replicate this model and employ so many devs for so long would be madness and career suicide. You'd have to start with something far smaller and slowly build, which would likely take decades.
The only companies I can think of that has done similar recently has been Ubisoft for Assassin's Creed. But even they realised they can't keep releasing every year as we moved above 1080p, though it seems Activision is finally following that. EA and sports titles are a little different as they are heavily iterative with larger changes only happening once every X years, but similarly a very difficult position to compete with directly.
Honestly it's bonkers.
@Titntin Redundancies often come with severance pay which is also often based on service. The 'Longer' you have been with a company, the more they have to pay out to terminate their contracts.
Of course redundancies are never a 'good' thing so I won't pretend anything different, but when you also acquire numerous other companies, especially those that do similar roles, you sometimes have to 'consolidate' and merge two teams into 'one'. I am not talking about Studios and Developers so much, but you don't need multiple 'Publishing' divisions within one company for example. Bethesda had its own Publishing department as does A/B and of course MS has its own too - so if you merge all that into 'just' MS Publishing and restructure, re-organise etc, certain staff will end up 'surplus'.
You don't need 3 different heads of Publishing for example when merged into one group. Of course the Publishing team itself may need to grow to cope with additional workloads of more studios but it may only need 50% of the staff.
Its not 'just' Xbox but across Microsoft that a number of redundancies have occured. I doubt too much its at the 'developer' level and maybe not even at a Studio level as they are required for 'Production', its more likely to be around restructuring and forward planning for the direction they want to go in the future.
@BAMozzy Thank you for this.
I'm actually very aware of such things, having worked for IBM for a while and having been made redundant in the games industry many a time. Severance pay is a lawful entitlement, not a mitigating factor to try and justify taking away a persons livelihood.
I'm aware that sometimes acquisitions mean you have too much resource in one area, but the AB deal hasn't even gone through yet, and I'd be mad as hell if I were asked to go whilst they are buying another 10 to 15K employees. Just the money they put in Bobby Kotick's pocket to make him go away would pay for those wages for another decade
I'm also aware that these lay offs are across the business. I was surprised Xbox was hit at all tbh, but I'd imagine the numbers in that division would be small.
@Titntin As I said, its never a 'nice' thing - but in some cases, it can be a 'nice' windfall as they get a decent lump sum and find work elsewhere quickly so actually gain 'financially'.
As for the A/B thing - how do you know if ANY of the redundancies are in related areas. For all you know, the majority could be in some unrelated areas of the entire Microsoft portfolio. Putting money in Koticks pocket to make him go away is little different to paying people a severance pay to make them go away too. Koitick will get a LOT of money, because he, like many others, own A/B and their 'Share' of the company will net them money from this deal. You are literally buying out ALL the 'owners' of A/B and giving each a set figure per share. Its not just Bobby, but the entire 'owners' of A/B are effectively losing that 'role' once the deal completes.
Not ALL of A/B will be retained, have a Job at MS, although they may be forced to take them on for a set length of time as part of the deal - we don't know if that was part of the agreement. Any restructuring too is unlikely to be done with the A/B deal in mind at this stage because as you quite rightly point out, it has NOT completed yet. You don't get rid of staff in anticipation that they will be 'replaced' when a potential deal goes through, which would seriously backfire on MS if it doesn't.
Therefore, its more likely to be a consolidation and restructuring around what they already have/need after acquiring numerous new Studios and then adding Bethesda 18months ago. It takes time to 'merge' everything into one 'cohesive' set-up. I bet Bethesda initially carried on as 'normal' for a few months at least and worked together during transition into MS.
I wouldn't be surprised if MS has another restructuring with some redundancies affecting 'Xbox' after the A/B deal has concluded and transitioned over fully to Xbox. Can you see MS keeping all of A/B's HR employees? They may need 'some' to cope with the extra 'staff' they suddenly have, but long term, they don't...
@BAMozzy
"As for the A/B thing - how do you know if ANY of the redundancies are in related areas."
Erm, the piece we are responding too? "As mentioned, Xbox is apparently one of the divisions to suffer, alongside the Microsoft Strategic Missions and Technology organisation, along with others."
I didn't wish to relate severance pay with the money they will offer Kotick, merely point out that the money required to get him out could have kept them people their jobs.
As for the rest of the info you provided regarding restructuring I broadly agree with everything you have added. I worked for EA for a time and saw many a restructure after that Borg collective absorbed some fine studios..
Restructuring after the A/B deal goes through is a given! 'welcome to Microsoft - here's your notice!' 🤣
@Titntin Xbox is different thing to A/B and as I said, it may well be down to restructuring around what they already have/need in place. Do you need the entire Zenimax HR, Publishing etc, staff teams that you also took on 18months ago for example.
What I meant was that the Jobs that are being 'lost' are not as a consequence of 'A/B' joining, but a consequence of where they are as a company right now. Those jobs would probably still be 'lost' whether the A/B deal goes through or not and then maybe another 'restructuring' will occur in another couple of years too as A/B become fully integrated into Xbox.
The point I was trying to make is that I doubt they are letting 'devs' go from their Studios only to 'replace' them with Devs from A/B. They need those devs to work on the games at those studios but they don't need Zenimax Publishing, Advertising, HR department etc as they can 'merge' those into 'Xbox' HR, Xbox Advertising, Xbox Publishing etc. Don't need multiple heads of each department when its now under 'one' company...
Therefore, you have to terminate some contracts because there isn't a role for them anymore. A head of HR for example at Bethesda Publishing isn't needed if Bethesda Publishing no longer 'exists' as a separate independent part of a company and its merged into Xbox Publishing. They may need to keep a few 'extra' HR employees to cope with the additional workload, but you don't need 'everyone'.
At some point, they'll merge A/B Publishing into Xbox too and again won't need 'everyone' but until they restructure and integrate what they want/need to cope with that increase in staffing/workload/output, they will again lay off those surplus to requirements.
Just because the article says that reduncies have affected Xbox too, doesn't mean that people are losing their Jobs as a direct result of MS buying A/B and more about where they are right now as a Company. Its not about using 'money' spent on A/B to keep 'surplus' staff employed unnecessarily for you as a Company, its about using your revenue for positive growth. Xbox has grown immensely in the past 4yrs or so - adding numerous studios and their Staff, recruiting to build up those studios. They also acquired a Publisher who basically does the same job as MS Publishing - so you have two staff teams for the same Jobs so you have 'surplus' staff.
So those staff would still lose their jobs regardless - so the A/B deal is irrelevant here. Its not as if they are being made redundant because someone from A/B is potentially coming too take that Job away from you. Its more likely that your 'role' is no longer available because they don't need 2 or 3 people to do the 'exact' same job that 1 person can easily do...
If Kotick has 500k shares, he will get a LOT of money because every share will be bought by MS. That's what happens when you buy out the 'owners' and often need to go above Market Value to entice them to sell - a big pay-off. It is no different from giving someone a pay off to terminate contracts and expect to pay out more for higher earners and/or long term employees so a CEO on a LOT of money would expect a 'high' severance pay and their 'role' is being 'severed' in the buyout.
What happened to Zenimax Board of Directors? They had their roles 'terminated' as part of the Buyout and no doubt got a big 'severance' Paycheck as a result...
@BAMozzy
Sorry, we appear to be talking cross purposes again. I never meant that these lay offs are as a result of the A/B acquisition and I've clearly pointed out somewhere before that this acquisition hasn't even gone through, so I don't relate one to the other at all. Of course they are not related when one hasn't happened?
I simply noted that when a company is just about to spend 70 billion and add another 15K to the workforce into an area of their business where they have made very little money (Xbox), being told to clear your desk today to save a small fraction of that, looks a little rough.
More enlightened companies would try and move or retrain staff, and often do.
I'm also perfectly aware of why they will pay Bobby a ton load of dollars, that doesn't need a long explanation. Again though, if you are just about to loose your job because they cant afford to keep you, it would bug me that they are pursuing such an expensive deal, that results is such large expenses, whilst simultaneously laying others off.
...and yes I've agreed when you are absorbing companies, you will gain unneeded heads. I even stated it will definitely happen again once the deal goes through.
Just corps doing what corps do.
When buying another Company that also has a LOT of cross-over with your company, then there are more 'casualties'. If what you are really interested in is the IP's, the Studio's etc to grow your game Production, you don't 'need' the Publishing division for example as you already have Xbox Publishing, don't need a separate Advertisement division to promote games, don't need separate accounting divisions only concerned with a 'few' studios, development costs, advertising costs, staffing budgets etc - that can all be merged into 'Microsoft' as a whole.
They may well be spending 70bn to add 15k to their workforce, but that is 'growth' and as I said, of that 15k, the board of CEO's managers of A/B will not be employed. Head of Studio's and Developers will still be required as they 'need' those to keep those Studio's operating and producing games.
Its not as if they went into Bethesda and sacked 100 devs working hard on Starfield (and whatever other projects) and then spending 70bn on acquiring staff. The Staff are somewhat of a 'by-product' of what it is you really want - which is the Studios, the IP's and the Publishing Rights too - not just new games, but all the 'old' games too.
When Embracer acquired Tomb Raider and Crystal Dynamics, they did NOT acquire the Publishing rights to existing Tomb Raider games so if you Buy the Tomb Raider Trilogy, money goes to Square Enix. If you buy Fallout 3, regardless of what platform, that money goes to Xbox now as they own the Publishing rights having purchased Bethesda Publishing.
Xbox wants the Publishing Rights, which are worth a LOT more than IP's, Studio's, Staff etc because they start generating money instantly. Its why they can Publish their 'old' games straight into Game Pass to start generating income instead of investing money in buying a Studio and/or IP and waiting for that game to be ready to publish before you can start to see a return on your investment. That's why Bungie cost 10x more than what Insomniac cost because Bungie also has its own Publishing rights where as Insomniac does not. They may own Sunset Overdrive, but MS owned the Publishing rights - of course they could make SO2 exclusively for PS.
Point is, I doubt the game development side has been impacted to much as that is the area they are trying to 'grow' and investing money in their 'portfoliio' of Studio's, IP's etc. They don't need to grow every part of Xbox at the same rate - so whilst they may have taken on 'extra' staff through purchases, they also need to restructure to make it an efficient and unified - All 'Xbox' made games will be Published by 'Xbox', All HR will be 'Xbox' HR with a unified standard across the company. May even have their own 'unified' game testing department instead of each studio employing game testers for example and instead of say 50-100 game testers for each studio, MS employs 500 game but they are used for ALL games, not just 1 studio. That could save a 30 studio company a LOT of money and provide better 'results'. If you have 500 people playtesting a game, you have a LOT more data and hours accumulated than 50 could manage so more efficient and cost effective - with no 'detrimental' impact to their consumers - but still have to get rid of staff if they 'merge' all game testing into one unified department instead.
@Titntin I have been at a company that was taken over and we had a choice of moving to the 'new' base of operations (instead of a 10 mile round commute, it would be closer to 200miles round trip) and a 'pay-cut' to drop down the ladder as 'my' senior position was already filled by their staff, find a job elsewhere or wait to be made redundant and take whatever severance pay I was due - equated to about 8k in early/mid 90's - however I got offered a 'senior' level job at a different company with a 30mile daily commute and slightly higher pay so took that. That was in Publishing too as I was a Graphic Designer for a family owned Printing business that sold up to a 'much' bigger Publishing/printing company who wanted the Publications to 'reach' our area. They hoped that around 50% of the workforce would move to make up for the additional workload and save on recruiting locally to them and then training to get them up to speed.
Not everyone can be 'retrained' or 'moved' around just to retain them. They maybe can't take a 'lower' paid role and significantly increase their commuting time/costs too. You don't expect a senior level Head of Advertising Campaigns to drop down to a 'trainee' level position and would likely look for another position 'equal' or at least close enough to their experience, pay etc. I could not of taking a Job, even an equal position, due to the significant increase in travel costs, time travelling and family commitments. So I was left with the choice of wait the couple of months as things got transitioned over to the new base, then be unemployed with a lump sum in the bank OR find a new Job ASAP and get out before you see all your friends, colleagues etc leave and the morale drops.
Anyway, It's where you invest to grow that matters and sometimes you have to chop out the dead wood, even cut down new growth in order to grow stronger, better and be more productive in the near future. If you have a Surplus of staff in some areas and cannot relocate them for whatever reason, you don't keep them on at the expense of your own growth and sometimes, you need to restructure to ensure you are able to provide the 'best' value to your customer - you don't want to keep paying out money to staff just out of some kind of pity and instead, get your customers to pay for that by increasing prices.
No one wants to hear of people losing Jobs, but sometimes you 'need' to do some pruning - especially after some seasons of rapid growth, to stabilise, to promote more stable root structure/growth that will provide a LOT more fruit in the near future...
@BAMozzy thanks for sharing your experience!
As I believe I've mentioned I've been made redundant too several times.
Once by Sony! I was working for Sony/Psygnosis making a game called 'Red Meat' in their ill fated Hanger lane studio. I hated it there as Hanger lane is soulless and I'd been working at Psygnosis Camden before, which was far more fun. The other game being developed there was 'Bloodbowl'.
One morning we arrived to find HR there and we were all unceremoniously made redundant with immediate effect and had to pack our stuff and be out by 10:30am! Fortunately the industry was much smaller then, and everyone knew everyone else. As I left the building, people from Bullfrog were there looking for me and they hired me for Dungeon Keeper 2 immediately, so its actually a good memory as I loved bringing that game to life. I have a framed copy of the game and cover with my name on it hanging in front of me now and several 'Horned Reaper' special items on display around the house!
I've seen the need to trim the fat from several perspectives and have my own experience with Sony to show that this is not an MS issue
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