Microsoft has confirmed a new round of layoffs which has reportedly impacted around 1,000 employees across multiple levels, teams, and parts of the world. This is the second round of job cuts for Microsoft this year and comes amid what could be a troubled acquisition of Activision Blizzard.
Microsoft, which was the brain child of Bill Gates and Paul Allen, was founded in 1975 and has since become one of the most successful gaming and tech companies of all time. Despite the success of products such as the Windows operating system and the Xbox line of consoles, the company has been feeling the strain of record levels of inflation and worldwide economic downturn. Along with competitor companies like Meta and Google, among others, Microsoft has been reorganizing its workforces to abate the impact of a looming US recession, even going as far as to lay off the entirety of its Modern Life Experiences team last August, which impacted around 200 posts.
On Monday, October 17, a spokesperson for Microsoft confirmed the latest round of job cuts, though they didn't provide an official figure. However, a report from Axios cited "an unnamed person familiar with the matter" as a source for the number of layoffs. To explain the situation, Microsoft reported the company's slowest revenue growth in more than five years in the quarter that ended on September 30 and claimed, "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 news comes alongside disappointment for Microsoft as their $70 billion ongoing acquisition of Activision Blizzard has been held up by a Phase 2 investigation by the UK Competition and Markets Authority (CMA). The CMA cited major antitrust concerns and announced the Phase 2 investigation on September 15, after Microsoft's response failed to placate the authority's worries. This blow could change the course of Microsoft's post-acquisition plans and could be a factor in the recent decision to let employees go. A successful merger of Activision Blizzard would bring lucrative franchises such as Overwatch, Diablo, Call of Duty, World of Warcraft, Candy Crush, Starcraft, and more to Microsoft, which could stimulate investment and economic growth.
Microsoft's recent layoffs are not unique in the tech industry or any other industry at this time. An unstable economy and a cost-of-living crisis will influence companies to tighten their belts with recruitment freezes, restructuring, and unfortunate job cuts. Fans of Activision titles will be waiting to see where Microsoft takes the company's IPs once more news is released on the current acquisition attempt.
Source: Axios