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Today Microsoft announced it was tightening its belt amidst a wider tech industry slump, with over 10,000 employees set to lose their jobs. The company’s Xbox gaming division won’t be exempt from the layoffs, with Bloomberg and others reporting that Bethesda, Halo developer 343 Industries, and more will be affected.
According to Microsoft CEO Satya Nadella, the job cuts come as a result of a downturn in business following the end of COVID-19 restrictions, with he company now having to do “more with less.”
“During the pandemic there was rapid acceleration. I think we’re going to go through a phase today where there is some amount of normalization in demand. We will have to do more with less — we will have to show our own productivity gains with our own technology.”
While COVID-19 had a profoundly negative effect on many industries, it proved to be a boon for the tech sector as people stayed home and relied more heavily on their devices. As a result, most tech companies went on a hiring spree – prior to the pandemic Microsoft had around 140K employees, and prior to these layoffs, they had ballooned to 220K employes. With a possible recession now looming, most major tech players are looking to reduce their workforces.
As for how gaming will be impacted, as mentioned, Bloomberg reports both Bethesda and 343 Industries have been affected, while Kotaku adds that Gears developer The Coalition is also losing staff. In a separate tweet, Bloomberg's Jason Schreier claims 343 Industries has been "hit hard." The type of roles those being laid off occupied isn’t known. According to official filings, at least 878 employees are being cut in Washington State, where both Microsoft and Xbox are headquartered.
Xbox Game Studios have already had issues getting a consistent slate of games to market, so it will be interesting to see the effect these layoffs might have. 343 is already struggling to get regular Halo Infinite content out, Bethesda is working to finish the much-anticipated Starfield, while The Coalition is developing multiple projects, including a new Gears, and helping other Xbox studios with their tech. In other words, all of them would probably say they could use more help, not less.
We’ll keep you updated if any new information about how Xbox studios are being affected by these layoffs emerges.
