In a recent announcement that has ignited intense discussions among industry experts and the public, Microsoft CEO Satya Nadella expressed that the company is “thriving” despite the recent layoffs of 9,000 staff and the cancellation of ongoing game projects. These layoffs are part of a broader restructuring process that began in 2023, affecting tens of thousands across various divisions.

The gaming industry has endured significant downsizing in recent years, with numerous game projects being shelved, studios closing, and major firms like Sony and Embracer Group also announcing layoffs frequently. While many companies cite financial challenges as the driving force behind these job cuts, Microsoft has reported its profits, which has led to questions about the disconnect between executive decisions and the reality faced by employees.

Nadella conveyed in a recent blog post, “Success is not about longevity…[it’s] about relevance.” He emphasized the pivotal role of AI in Microsoft’s strategy moving forward, even as suspicions arise that the company might be employing AI to replace those who have been laid off. Despite Nadella’s optimistic outlook on the company’s performance metrics, many have criticized his remarks as being tone-deaf and dismissive of the difficulties that laid-off workers are currently facing. Others, however, argue that such tough choices are sometimes essential to the company’s future, leading to widespread debates about finding a balance between ambition and responsibility.

Which Studios Have Felt the Impact of Microsoft’s Layoffs?

Several of Microsoft’s acquired studios, including notable ones in the Xbox gaming sector, have been affected by these widespread layoffs. This includes Tango Gameworks, Turn 10 Studios, ZeniMax, and Rare. With thousands losing their jobs during this challenging period for the gaming sector, industry veterans and the public grow increasingly concerned regarding Microsoft’s trajectory and the eventual fallout from these decisions.