Rumor has it that Microsoft is preparing to enact mass layoffs across its gaming division this July, following multiple reports out of Bloomberg plus recent comments made by new Xbox CEO Asha Sharma and Chief Content Officer Matt Booty. The Communications Workers of America Union, which represents thousands of video game employees at Microsoft and beyond, is preparing to negotiate for employee protections, while calling for transparency from executives and demanding basic dignity for developers.
Sharma and Booty laid the groundwork for layoffs in early June, with a memo marking the first 100 days of new Xbox leadership.
“We have found ourselves over-extended as we executed on changing strategies in a landscape of more readily available content,” the pair wrote. Including the hard-fought acquisition of Activision Blizzard King, which cost Microsoft $69 billion in 2023, Xbox spent more than $89 billion in investments and studio support over the past five years, while the segment’s annual revenue declined by nearly half a billion dollars, the memo stated.
“Going forward, this cannot continue,” Sharma and Booty wrote, ominously. Bloomberg simultaneously reported that Xbox was planning substantial layoffs in July, right after the end of Microsoft’s fiscal year. A few days later, reports emerged that Xbox was shuttering or selling off three of its studios, Double Fine, Ninja Theory and Compulsion Games.
During a media call on June 29, CWA offered a clear message for Xbox leadership.
“We’re here to say this plainly: Those workers will not be treated as disposable,” CWA District 9 Vice President Frank Arace said. He argued that “the money is there” to keep Xbox teams intact, but that executives are funneling it elsewhere with little care about the human or creative impact of layoffs.
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