As mass layoffs become standard practice at companies throughout the tech industry, a new report suggests that Microsoft may be the next tech juggernaut looking to eliminate thousands of positions. The news of the potential cuts at the company, known to gamers worldwide for its Xbox brand, comes as competitors in the gaming space like Amazon’s Luna announce layoffs of their own.
With its Windows operating system, Microsoft Office suite, and Xbox brand, Microsoft’s products have become a familiar sight in offices and game rooms worldwide. Even as Microsoft continues to grow its presence in the gaming industry, purchasing publisher Bethesda Softworks in 2021 and announcing plans to acquire Activision in early 2022, it and other companies in the gaming industry are looking for ways to cut costs as the global economy slows following the pandemic. These job cuts aren’t limited to just developers and publishers, either, with video game retailer GameStop announcing “big” layoffs at the company late last year.
In a new article from UK news organization Sky News, it is reported that Microsoft is preparing to eliminate as many as 11,000 jobs at the company later this month. The article states that Microsoft is set to cut “roughly 5%” of its workforce worldwide, though no details were provided about where these cuts would come from within the company. News of the potential layoffs at the gaming and tech giant, which the article speculates would come before CEO Satya Nadella speaks to investors on January 24, come as Microsoft faces new scrutiny from the European Union over its proposed acquisition of Activision Blizzard.
Attempting to provide context for the rumored layoffs, the article references statements from Microsoft late last year warning of decreased revenues as the customers for the company’s cloud computing services, which have become a significant part of Microsoft’s earnings, reevaluate their spending. If Microsoft were to eliminate such a significant portion of its workforce as suggested by the Sky News report, it would be following a pattern established by other companies in the gaming and tech industry over the past several months. In addition to the elimination of thousands of jobs at developers and publishers across the traditional gaming industry, the VR gaming market saw similar staffing cuts when Meta announced mass layoffs at the company in late 2022.
Although the reports of these mass layoffs at Microsoft have yet to be confirmed, the move would certainly be in line with similar layoffs seen across industries worldwide. It’s uncertain how eliminating so many jobs would affect Microsoft’s gaming interests, but for Xbox employees, it’s likely proving challenging to focus on delivering fun when they know their job may be the next one on the chopping block.
Source: Sky News