On Wednesday, July 2, Microsoft announced plans to lay off approximately 9,000 employees, which is about 4% of its global workforce. A significant portion of these job cuts is affecting the company’s Xbox division and associated gaming studios, resulting in the cancellation of several upcoming titles.
While Microsoft has not disclosed the exact number of employees impacted within its gaming arm, which had around 20,000 staff as of January 2024, the layoffs appear to be extensive. This marks the fourth major round of job cuts by the tech giant in the past 18 months, reported The Indian Express.
According to an internal email obtained by Variety and later confirmed by Microsoft, Matt Booty, Head of Xbox Game Studios, said: “We have made the decision to stop development of Perfect Dark and Everwild as well as wind down several unannounced projects across our portfolio. As part of this, we are closing one of our studios, The Initiative.”
In total, at least three games have been cancelled as a result of the restructuring.
The Initiative, which opened in 2018, had been working on a reboot of the classic first-person shooter series Perfect Dark. The cancelled game was a sci-fi espionage title that had been in development for several years.
Another cancelled project is Everwild, a long-gestating title that had been in the works for over a decade at Rare, the studio behind Sea of Thieves. Founded in 1985 and acquired by Microsoft in 2002, Rare is known for beloved titles such as Battletoads, Donkey Kong Country, GoldenEye 007, Kinect Sports, Kameo, and Banjo-Kazooie.
Zenimax Online Studios, the team behind the popular MMORPG Elder Scrolls Online, is also affected by the layoffs. As a result, the studio has shelved its upcoming MMORPG project codenamed Blackbird.
According to Engadget, which cited “a developer with knowledge of the situation,” at least five employees at Halo developer 343 Industries have been laid off as part of Microsoft’s latest round of job cuts. The studio, which currently employs between 200 to 300 people, is reportedly working on multiple projects, including the next major installment in the Halo franchise.
Additionally, Forza Horizon developer Turn 10 Studios is said to have laid off more than 70 employees.
Meanwhile, Stockholm-based King – the gaming studio behind Candy Crush and acquired by Microsoft in 2023 as part of its Activision Blizzard deal, is reportedly cutting 10% of its workforce. A Bloomberg report, citing sources familiar with the matter, stated that around 200 employees have been impacted.
Layoffs have also hit Raven Software, a long-standing developer known for titles such as Call of Duty: Black Ops Cold War, Call of Duty: Black Ops 6, Singularity, Quake 4, and Marvel: Ultimate Alliance.