Xbox Installs 1,600 People Today, With Another 1,600 Configurations to Come – WGB

The great reset for Xbox has officially begun. Five studios on Xbox have been revealed to be moving away from the Xbox brand. Two are independent, two are being sold to new owners, and one is still standing. You can read my separate breakdown of the affected studios here.

In this article, we will focus on the most gruesome part of the story: the layoff.

According to a report from Bloomberg, Tom Warren at The Verge, and Christopher Dring at The Game Business, Xbox has laid off about 1,600 people today, Monday, July 6. However, that’s not all. Another 1,600 jobs are expected to be eliminated in the coming months, or during Microsoft’s fiscal year.

Xbox confirmed the numbers: 1,600 today, with another 1,600 to come.

That means today isn’t the end of the bloodshed for many Xbox employees. Today is just the beginning of a year-long period of uncertainty.

These cuts come as part of Microsoft’s broader round of layoffs. Bloomberg reports that planned reductions across Microsoft total approximately 6,400 jobs, approximately 3,200 of which come from Xbox. Warren, meanwhile, reports that Microsoft is laying off 4,800 workers today, with more than 30% of those cuts coming from Xbox.

But rather than get bogged down in company-wide numbers, let’s focus on Xbox itself.

According to Schreier, Xbox had about 16,000 employees before this restructuring. After a total of 3,200 cuts, it will drop to around 12,800. That’s about 20% of Xbox employees.

The truly frightening part of these layoffs is not just that 1,600 people have lost their jobs today. That’s scary enough. Surprisingly, however, it may not even be enough to take the title of one of the biggest layoffs in the video game industry. Microsoft previously announced plans to cut 1,900 jobs at Xbox, ZeniMax and Activision Blizzard in January 2024, a story I covered at the time.

No, the really bad part is that another 1,600 people will now spend the next months wondering if their careers are next.

Who could it be? Which studio can we be in? Nobody really knows.

In a new video about his reporting, Schreier says that Xbox Game Studios will see major cuts, and that ZeniMax will also be hit hard. Activision Blizzard will also see some cuts, but seemingly less than both ZeniMax and Xbox Game Studios.

Game Business also reports that the Xbox platform team will be hit hard, and that Xbox hopes that these cuts will simplify the business and allow it to move faster.

In other words, this isn’t one troubled studio making the cut. This is an Xbox that cuts across multiple studios, publishers, platforms, utilities and management. No one is safe.

In Asha Sharma’s internal memo, she is blunt: “Our business today is not healthy.”

According to Sharma, Xbox operates at three to ten times the margin under the same platform as publishing businesses. He says the Xbox needs a “reset.”

Stadium teams are reportedly 40% larger than at the start of the generation, while the player base and playing time have both decreased.

Basically, Microsoft’s argument is that the Xbox is too big, too thick and too slow. And the solution is thousands of people lose their jobs.

For Xbox and Asha Sharma, this is the reset that was promised. And, to be blunt, it’s probably the most expected and necessary reset the company could do. That doesn’t mean I like it or want it. If the Xbox is to survive in anything like its current form, this level of cutting may have been inevitable. Something was going to have to change.

But for workers, the reset is nothing more than a disaster. Many people are unemployed as of today. Many will be out of a job next year. And perhaps the worst part is that we don’t know if this will work.

The Xbox is in such a strange, difficult situation right now that it’s impossible to say whether this level of cutting will save the product, or just make it something very different from what people once understood the Xbox to be.

That doesn’t mean it’s all doom and gloom. Xbox still has a chance. It still has big franchises, talented studios, Game Pass, cloud infrastructure, PC, and the ability to be the biggest third-party publisher in the world if that’s where this road eventually leads.

I’m sure the Xbox will continue to exist in one form or another for many years to come.

I’m not so sure it will look anything like the Xbox we knew.

And I want to end this on a personal note: this week has been video game time.

Sony’s reported move away from physical games by 2028 has raised questions about ownership, access, preservation and whether the next PlayStation will be digital-only. And now the Xbox bloodbath has begun, with thousands of people losing their jobs and even more left to wait to find out if they’re next.

The industry feels like chaos. Studios and budgets are getting bigger. Sales expectations are through the roof. The cost of it all is insane. Grand Theft Auto 6 is getting closer to the whole business, which may have pulled us into the $80 future that every other publisher will want to chase.

It’s a really sad time right now.

It’s hard to be a fan. It’s hard to want to read the news. It’s hard to want to write about stories.

But it is.

Let’s just hope things get better.

And let’s hope the future still has Xbox in it.