Microsoft layoffs hit Xbox & Bethesda game studios – Starfield, Halo Infinite & Gears of War studios affected

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Microsoft is enacting plans to cut 10,000 jobs by the end of March 2023, with the first wave of redundancies reportedly including layoffs across Starfield developer Bethesda Game Studios, Gears of War developer The Coalition and Halo Infinite studio 343 Industries.

This will cast a shadow over Microsoft’s Xbox Developer_Direct stream next week, which is expected to give updates and release dates for a number of key upcoming games, including Forza Motorsport, Minecraft Legends and Redfall, with a separate stream expected for Starfield.

While layoffs will have been targeted, they could affect the final stages of development on Starfield, as well as the multiple projects that The Coalition have in the works, which includes their first original IP. For Halo fans, it potentially deepens the troubles that Halo Infinite faces, with 343 Industries having originally planned the game to be a 10-year product, but struggling with the expectations of live services and releasing delayed features through 2022. In particular, the Halo campaign team has reportedly been hit hardest, draining hope for expected story DLC campaigns as long-time Halo figurehead Joe Staten returns to his role a Xbox Publishing.

Per Schreier, studio head Pierre Hintze wrote to 343 employees to say that “we’ve made the difficult decision to restructure elements of our team, which means some roles are being eliminated.”

Microsoft is cutting 10,000 jobs from the tech giant’s overall workforce of around 221,000, with the confirmation of this plan by CEO Satya Nadella noting that this represents less than five percent of the total workforce. Microsoft has also stated that they will be spending $1.3 billion in order to cover the redundancy packages needed for those laid off.

It comes as many tech companies are making similarly sweeping layoffs – Amazon is cutting 18,000, for example – coming just a few years after a boom in hiring in recent years during the pandemic-led lockdowns that saw a rise in tech usage, which saw Microsoft grow by 40,000 employees in the 2021-22 fiscal year, thanks to mass hiring and acquisitions of companies like Bethesda. The looming threat of recession and a return to pre-pandemic spending habits that Nadella used to justify the move.

We’ll have to wait and see how this plays out across the company, but needless to say it is quite concerning for Xbox gamers who have seen five years of diminishing returns from Xbox Game Studios, the console manufacturer failing to really back up their consoles with first party releases, and is especially disheartening as 2023 is otherwise set to be a big year for Xbox games.

Source: KotakuBloomberg, Jason Schreier

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  1. “We’ll have to wait and see how this plays out across the company, but needless to say it is quite concerning for Xbox gamers”

    I’d guess it’s more concerning for the 10000 people soon to be out of a job. Just because it’s ‘less than 5% of the workforce’ doesn’t mean this isn’t to be sniffed at, that’s a lot of lives.

    I also don’t understand how they can afford 1.3 billion in severance pay but not afford to keep these people on? That’s £130,000 per person if it were to be split equally. Surely MS aren’t making such heavy losses to have to fire so many people?!

    • Certainly didn’t mean to diminish that point or excuse them for making such sweeping layoffs, but mainly to provide context for just how big Microsoft are, how fast they’ve grown in the last few years.

      • I hope my comment didn’t sound like I was having a go. Taking into consideration MSs lackluster first party output over the last number of years, obviously there is a concern for both groups of people.

        Here’s hoping those getting laid off land on their feet, in similar roles as they are now (assuming they like their jobs and are good at them ?), and that MS can pull their finger out and provider their customers with decent high quality games.. personally, I feel like they’ve been giving up for awhile now.

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