Microsoft’s Xbox division is undergoing the most significant restructuring in its history, with the loss of 3,200 jobs.
That represents 20% of the company’s workforce as new CEO Asha Sharma moves to revive the struggling gaming sector.
In a note on Monday, July 6, Sharma said “our current business is not healthy,” citing operating margins three to 10 times lower than comparable platform and publishing companies.
She wrote: “We need to reset the Xbox. »
The restructuring consists of the immediate elimination of 1,600 jobs, followed by the rest within a year. In addition to this, four studios will leave Xbox: Compulsion Games and Double Fine Productions will become independent studios, retaining their intellectual property and finances for future projects, while Ninja Theory and Undead Labs are negotiating new owners for the completion of Senua and State of Decay 3. Consultations are also underway at Arkane Studios in France on possible strategic developments.
The layoffs extend beyond game development, affecting teams at Activision, Bethesda/ZeniMax, Blizzard, King, Mojang and Xbox Game Studios. But Sharma confirmed that no publicly announced first-party games or projects would be canceled.
According to Sharma, Xbox’s problems arise because the company launched into the latest generation of consoles with a lower installed user base and higher costs, as well as lower growth in Game Pass and cross-platform.
To address these issues, Sharma announced a new organizational structure with no more than five management levels, reducing supplier costs by 50% and simplifying operations. Helen Chiang has been promoted to COO with full profit and loss responsibility for content, materials, platform and services.
Longtime executive Dave McCarthy is also retiring from his position at Xbox after 17 years.
