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Microsoft is cutting jobs once again. After laying off some employees in the gaming division in January and around 6,000 employees across various verticals in May, the company on Wednesday confirmed to The Seattle Times that it is reducing its workforce once again by almost 4%.
The latest round of layoffs is part of “organizational and workforce changes that are necessary to position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson tells Gizmodo.
Microsoft hasn’t confirmed which departments are affected or how many employees have been let go. The Redmond-based company had 228,000 employees as of June 2024. After reducing the recent job cuts, 4% of the workforce would translate to nearly 9,000 employees.
Gaming is among the departments that have taken a major hit. “To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness,” Xbox leader Phil Spencer writes in a memo to employees, viewed by IGN.
Those affected will be contacted by HR and be provided with severance benefits as required by local laws, including pay, healthcare coverage, and job placement resources, Spencer notes. Those eliminated from Xbox can apply for open roles across Microsoft Gaming, where their applications will be given priority, he adds.
Following Spencer’s statement, Xbox Game Studios head Matt Booty confirmed to employees that it would be cancelling the development of games like Everwild, Perfect Dark, and several other announced projects.
These developments follow a Bloomberg report from last month that said thousands of Microsoft jobs would be cut after the end of the fiscal year in June. That report suggested marketing and sales teams could take the biggest hit; however, the latest reports indicate gaming has been affected more than other departments.
We have reached out to Microsoft for further clarification regarding the departments affected and the number of workers let go.
The months and years ahead may continue to be tough for tech employees. Intel is planning to lay off 15-20% of its factory workforce amid financial struggles, while Amazon CEO Andy Jassy has already warned employees that AI agents will replace a considerable number of jobs at the online retailer in the next few years.