This week has been dominated by the news that 10,000 people are being laid off from Microsoft's workforce, and Xbox boss Phil Spencer has responded to the news in an internal email that was shared by Kotaku earlier today.
In the email, Spencer acknowledged it had been a "difficult week" for Microsoft, calling it a "challenging moment in our business" and explaining that the actions of the past few days had been "painful choices".
"This is a challenging moment in our business, and this week’s actions were painful choices. The Gaming Leadership Team had to make decisions that we felt set us up for the long-term success of our products and business, but the individual results of those decisions are real. I know that hurts."
The Head of Xbox then went on to explain that there would be many opportunities over the coming weeks for Phil and the leadership team to answer questions from employees, stressing the desire to be "as transparent as we can".
"Moving forward with ambiguity is challenging, but I am confident that together, we will get through this difficult moment in time."
He finished off the email by thanking everyone for their "deeply appreciated" work:
"I am confident in our future and proud to be part of this team, but also conscious that this is a challenging time and I want to thank you for everything you do here."
We still don't know the full damage to the various Xbox divisions as of yet, although it's been suggested that Halo studio 343 Industries has been hit particularly hard by the job cuts over the past few days.
What are your thoughts on this? Let us know down in the comments section below.
[source kotaku.com]
Comments 44
@Kaloudz sadly most management seem to have stayed in position. seems our wishes wont be fulfilled
I mean, when a company can make profits every year and invest $64 billion to buy another company, it is not like they can’t afford to keep these staff. So Microsoft doesn’t get sympathy from me on this (regardless of reasons).
Large tech layoffs are a common thing though. They also highlight economic downturns. So prepare for the worst.
I get what people are saying, but as companies roll through time they get fat and inefficient. This is just an adjustment exercise. 5% of their workforce is a fat adjustment... If it was 30-50% that is a sign they are cutting and reassessing the business.
“We need all the spare cash to buy a company for $40bn so someone had to go”
Pretty sure they had 40k new hires not long before this, and it's common for big producers to restructure their development teams over time. I think 343 was going to get some restructuring no matter what.
@stvevan What management is even left at 343? Most of the management that was in charge during Infinite development have left or been replaced including Bonnie Ross. Most of the management there had nothing to do with Infinite like Pierre Hintze
Pretty sure the money is locked down by the banks, and MS can’t touch it until the deal is officially off. Les the deal goes through and then they don’t have it.
Phil Spencer isn't as bad as some, but he's a Microsoft lifer. He's corporate through and through.
@EliJapan No! 343 studios needs hardcore reconstruction, why keep pouring money into a sinking ship? They had 10 years and a bigger budget than 90% of other studios.
What’s that? Corporate bonuses and increased shareholder payouts? Say it isn’t so.
Microsoft hasn’t changed.
Some analysts are saying that we’re already in a recession, so massive layoffs by tech companies are required to stay ahead of a bad financial outlook. Amazon and Google just cut a large number of employees.
He's also pleased to announce his paycheck hasn't been affected and that he still plans on spending nearly 70B on buying Activision and all its staff.
@LX_FENIX Yeah he's no Bobby Kotick far from it but let's not pretend he's any better then someone like Andrew Wilson or Jim Ryan. Phil's great at PR talk and bringing himself down to our level in his talk and the way he appears but he's still a slimeball corp suit who doesn't give a damn about anyone "below him".
Xbox community is incredible, dump on Halo for a year straight and then are bewildered that people lost their jobs. I actually like and play Halo Infinite. But for everyone who dumps on the game non stop to now bellyache that bad guy MS laid off staff, come on.
I had hoped 343 was going to refocus under Joeseph Staten but whoever it is I hope they move on to Halo 7, they need a clean slate. Infinite has a tainted public perception. It will not climb back like No Mans Sky or Cyberpunk, either. Drop the custom engine and drop the overuse of temp contractors. Make Halo great again. Infinite was so close. It really came out of the gate swinging hard.
It costs a lot to pay the top talent.
Phil is partly to blame for the poor performance of these dev teams and for the state of things in general. Most real leaders would shoulder some of that blame but he seems to get a pass from most Xbox fans.
@Jenkinss Agreed, i really really like Infinite, but at this point, it's reputation is beyond repair. 343 needs to be reconstructed and Halo 7 needs to return to it's roots. HI did a lot right, but it was released unfinished and hit with too many cancelations, delays and slow-coming content.
People have been relentlessly calling out MS for restructure at MS game studios, and now it's happened, alot of the same people are very angry about it. I'm starting to think some of you may just have an irrational hatred of MS and Phil Spencer or something.
Looking from the outside in I personally would lay more blame towards Matt Booty, for the problems at MS game studios. Its more his job. But I could be wrong as I do not know the inner workings of MS.
It's a sad day for everyone involved, and I wish them and their families all the best for the future.
but Microsoft has it best year in earning, this do not make sense, why they are lay off so many people?
vixe this dont look good for Xbox, if they sufered in 2021, this lay-off could impact the development of his future games, considering they are lagging behind Sony/Nintendo
One of the (many) sad sides of capitalism sadly. Always increasing profits, to keep investors and share holders happy being more important to keep the market elevated than people’s jobs and livelihoods.
Yet without that, belief and confidence in the company will go down, and there will be more job losses anyway. Vicious cycle of capitalism. Damned if you do, damned if you don’t in current market conditions.
At the same time also worth bearing in mind Microsoft’s increased their staff by 40,000 people in 2022.
Greed is why all this is going downhill open your eyes!
I think Microsoft should get on with their business and Phil being Xbox should just pop up know and again with the good exciting stuff.
Keep out of comments and the public eye regarding stuff like this and the Activision goings on etc.
work hard in the back ground with his studios getting games out at the desired quality.
His negative energy going public on all this is a waste of time.
He needs to be the positive PR chap.
Another handy reminder about MS, Sony, Nintendo, EA, Ubi Soft, Activision Blizzard etc etc.
They exist to make money, the people they have to please are their shareholders. They aren’t your friend. They are businesses.
I'm pretty sure the 10,000 people unemployed during basically a recession is harder on them that the trillion dollar corporation.
I hate to say it but the layoffs were necessary. Corporate bloat leads to mismanagement and mismanagement leads to a lull in productivity. Want to know why Xbox exclusives have slowed to a crawl, there’s your answer. Downsizing like this isn’t great for the people who get fired, and I sincerely hope they get back on their feet, but it’s also an inevitability you need to account for when working in any industry.
I’m sure he made the decisions bravely and intentionally. 🙄🙄🙄
It’s happening everywhere, google are laying off 12’000, Amazon 18’000 and so on. It’s just a fact that these mega companies bloated during covid while everyone was at home spending money and now they’re shedding some of the excess weight.
Like I said the other day how many online ragging on Microsoft are sitting at home waiting for Amazon packages while saying nothing. Plenty I’d put money on it.
More towards executives everywhere, but how much did they spend on the sting concert, how many annual salaries of employees did they spend. Always pisses me off when heads talk about wasting money, keep expenses down and they do something like that. Again executives everywhere not just microsoft
So much heat for laying off excess staffs who may not be needed anymore for Microsoft. And not all the staffs are proficient workers either. And it seems like they can't fire dead weight. Should have just opened a charity rather than a company. Corporate jobs aren't permanent. The employee knows that. But I guess world is a bit tough place but so much crocodile tears being shed is unbelievable. Those who are so worried about this layoff should open a company and employ these poor souls.
@EliJapan maybe the problem it's not the money.
@JayJ they're acquiring Activision & getting another 10,000 (I'm guessing I don't actually know the number) employees not a good look when they're saying they had to cut the workforce by 1000 people while simultaneously saying they can't wait for another 10,000 people to join the company lol
@Savage_Joe nah then they'd have less time to work on doom / quake Microsoft should just sell the IP back to bungie
@Would_you_kindly while that’s true. They aren’t going to be keeping the entire new workforce. I can’t imagine them keeping overlapped positions.
Not to mention King is a cash cow; and comparing that to like the Holo Lens team? Don’t get me wrong it sucks, but a lot of companies over-hired in States. That said yes it’s bad optics.
Phil, how about a tweet to cheer them up? Praise their work? No? Ok then.
On a serious note: the IT sector is firing people left, right and centre. Google has just fired 12000 people. Amazon 18000 people. It's not just MS. Apparently the IT sector isn't the honeypot it has been advertised as for the last 2 years.
Getting Devs in smaller companies has been a nightmare for the past couple of years. Decent ones anyway. Big companies expanded quickly due to the pandemic etc and paid big salaries to hoover up talent. There's still a hell of a lot roles to fill out there after the Great Resignation of 2021.
Last year so much PR about how good Xbox was doing - GPU was generating so much money and everyone was celebrating. Money to throw around. What happened?!?!?!?
Maybe the PR was spin?
It seems confusing to me. Added on the money they are splashing on studios and companies… and a year without exclusives. Something is going wrong.
I’m not sure laying off worker bees is the solution mind you.
Sounds like those making “the hard decisions” need to look at themselves and their own positions.
@Would_you_kindly you know, maybe they should put you in charge of MS. With your infinite wisdom you could replace Phil. Why on every site do you post such negative passive aggressive comments? And why the lol after every comment? Is everything that funny?
Oh no, they only made $99 billion and not the planned $101 billion... Big companies always screw up the staff, money is always No. 1.
@EliJapan sorry, I was too cryptic. Lack of money to pay salaries is not the only reason to lay off workers. Sometimes you need to lay off to tune your processes and labor.
@cburg the lol after my comments is precisely so they aren't perceived as 'passive agressive' & anyone would do a better job than Phil Spencer at this point , he's all talk & no action
I think part of this is a bit of a reset in the industry which is affecting all companies at the moment. I work for a waste company, and during the pandemic we were really struggling to get/retain IT staff to help with our online billing portal, and our IT support team. We were constantly having to up people's salaries to stop them leaving (whilst other parts of the business got nothing) and also paying top whack for any new employees. Now that we're back to a sense of normality and a lot of our development has been completed, combined with the number of IT staff now in the market, means that there are a lot of our staff looking over their shoulders now as a lot of their positions are now no longer required and they now appear to be overpaid.
@theGoodChap No no no. You'd need to keep that refrigerator on and running just in case you hurt it's projected feelings by getting rid because feelings > data, logic and common sense.
the result of bragging about gamepass, but in the meantime, not capable of making a new exciting IP wich make people want a xbox, and people who buy xbox games.(the toll you pay when you give things for free)
xbox is an empty shell since 2014, because it has nothing to offer.
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