Concerns Arise in Xbox and Bethesda as Part of Broader Workforce Reduction
Microsoft has officially announced plans to lay off 10,000 employees, raising concerns about the impact on gaming divisions such as Xbox and Bethesda. CEO Satya Nadella stated that these changes will result in a reduction of the overall workforce by 10,000 jobs through the end of March.
The layoffs, representing less than 5% of Microsoft’s total employee base, will incur a $1.2 billion charge this financial quarter. Nadella explained that this charge includes severance costs, adjustments to the hardware portfolio, and expenses related to lease consolidation for higher workspace density.
Reports suggest that 343 Industries, the developers of the Halo series, and Bethesda, known for the upcoming Starfield title, are among the affected teams. Some individuals affected by the layoffs, including ten-year veterans of Xbox studios, have already been identified.
As Microsoft’s $69 billion acquisition of Activision Blizzard is imminent, the timing of these layoffs has drawn attention. Activision Blizzard, which employed 9,800 people according to its 2021 annual report, is now part of Microsoft’s ongoing restructuring.
Nadella outlined benefits for affected US-benefit-eligible employees, including above-market severance pay, six months of continuing healthcare coverage, stock award vesting for six months, career transition services, and a 60-day notice prior to termination. Benefits for employees outside the US will align with respective employment laws in each country. The full scope of the layoffs and their repercussions on gaming development teams is yet to be fully disclosed.