Microsoft’s new layoff plans have hit Xbox for the second time this year. Among the many tech businesses, Microsoft’s employee reduction plans have been quite apparent over the last few months, and despite their many large-scale product and tool releases, they have been just as proactive with releasing employees. In January, Microsoft’s layoff had centered around its gaming division which included its Xbox and newly acquired Activision Blizzard team and over 1,900 employees had been let go. 

The company also laid off over 1,000 employees from its HoloLens and Azure teams less than a month ago. Microsoft’s employee cuts in 2024 are occurring on a much larger scale than the industry expected and it appears the organization isn’t done with its “organizational and workforce adjustments.”

Microsoft’s New Layoff Plans Remain Unclear

The full scale of Microsoft’s new layoff plans has not been revealed by the company and neither have they provided any official notices to supplement the news of job cuts at the organization. We’re also uncertain if this move is central to Xbox or if other teams are being affected by job cuts, but employees who have spoken up so far appear to be from the Xbox team. 

News of the next round of the Microsoft Xbox layoffs came to light after employees began to come forward on social media platforms to announce that they had just been terminated from the organization. One of them included Xbox’s Jessie Thomas who had been with the company since 2015 and currently held the role of Senior Business PM of Culture Program. She was on vacation when she found out she was being let go. 

Other employees affected by Microsoft’s employee reduction efforts also showed up on X/Twitter and LinkedIn to confirm that they were being laid off after years of service to the organization, with the termination effective immediately. The handful of employees who have spoken up may be part of the earlier termination plans and may not represent Microsoft’s new layoff plans, but considering they weren’t informed about their job cuts earlier, it seems more likely that the company is moving forward with cutting down more positions at the organization. 

Cory Ebert, a Technical Program Manager at Microsoft, posted about his job termination on LinkedIn, “Well, this isn’t how I thought today would go. After nearly 15 years (seriously, two months shy), Microsoft has made the decision to end our working relationship effective immediately due to changes in the business direction and landscape.” He remains hopeful that another position may be available at the organization and states, “I will be actively looking for internal opportunities to maintain my time in the role and continue the journey with Microsoft.” Whether Microsoft will be open to an internal transfer is something he will have to explore. 

Microsoft’s employee reduction plans led the company to shut down four of its gaming studios earlier in May, which was a very drastic move for the company. One of the studios, Tango Gameworks, was the force behind the successful game Hi-Fi Rush, so the decision to close down a studio with a decent history of success showed the company’s genuine goal of bringing down the company numbers, or alternatively, concentrating its resources away from gaming.

Senior Members are Not Exempt from the Microsoft Xbox Layoffs in 2024

During a previous round of Microsoft’s Xbox layoffs, many senior team members were also let go and some others made voluntary exits from the organization. Blizzard President Mike Ybarra and Blizzard Chief Design Officer and co-founder Allen Adham were among those who chose to leave the gaming division at Microsoft. Their exit and the exit of those let go with Microsoft’s new layoffs suggest the company is not shy about eliminating senior employees and those who have had extensive careers within the organization. This is what makes the layoffs this year especially worrying. 

A similar fate befell the Supercharger team and its experienced leader at Tesla when layoffs took the organization by surprise. Job security is something every employee seeks but it has become much harder to guarantee that any particular role will remain unaffected by large-scale job cuts like the Xbox layoffs in 2024. 

Do We Have a Reason for the Microsoft Xbox Layoffs?

There is some talk that Microsoft’s employee cuts in 2024 could have resulted from their goals to move their resources away from their workforce and towards their extensive AI endeavors, but these assumptions remain unverified. The company has significantly ramped up its investments in its AI assistant Copilot, and along with the high processing demands of AI, there comes a hefty demand for resources as well. There is a distinct possibility that the rise in AI has prompted some of Microsoft’s employee reduction processes.

Another explanation for Microsoft’s renewed attempt at layoffs comes from FirstPost—the news pages suggest that the job cuts could be linked to the company’s conclusion of its fiscal year. According to their account, Microsoft’s 2024 fiscal year ended on June 30, and just like other businesses, it turned to reorganization efforts to begin the new year. This could be the case, but it doesn’t set a promising precedent for the company’s next quarter either. 

It’s also essential to point out that layoffs have been witnessed beyond just the tech industry. Workers at John Deere, for example, were recently informed that they would be let go by August. An extended exit time period gave employees some room to find an alternate source of employment before losing their jobs but in other situations,  immediate termination has left many unprepared.

A major company like Microsoft is likely to provide employees with a satisfactory compensation package, but no details have been made public on just how employees are being compensated at the tech company. 

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