Xbox is reportedly planning yet more layoffs soon. An internal email to employees from CEO Asha Sharma puts the blame on the company's wide investment in new content and studios – a big bet which has seemingly failed to pay off.
Bloomberg reports that Xbox plans to announce "major" layoffs soon after Microsoft's fiscal year ends on June 30. Alongside the cut jobs, the company is also said to be "significantly" cutting budgets for marketing and other, unnamed parts of the business.
"Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform and hardware subsidy, but our annual revenue has declined nearly half a billion during that time," Sharma and chief content officer Matt Booty wrote in a message to employees that was also shared online. "Going forward, this cannot continue."
This message does not specifically mention layoffs, but it does ominously label the "next 100 days" at the brand as an "Xbox reset." Sharma and Booty also say that "we expanded our studio system when we needed a pipeline of content to meet multiple strategies across subscription, streaming and devices. In the process, we have found ourselves over extended as we executed on changing strategies in a landscape of more readily available content."
Certainly, there were plenty of fears about that kind of over-extension when Xbox first started its studio buying spree years ago – the acquisition of Activision Blizzard was just the obscenely expensive cherry on top. But, apparently, more acquisitions are on the table, especially when it comes to Xbox's platform infrastructure, to "help us win in hardware, PC, mobile, and streaming."
Reporting from The Verge (paywalled) indicates that this reported downsizing could include entire studio closures or a shuffling of the Xbox Game Studios lineup.
The threat of these layoffs now looms just after a new Xbox Games Showcase teased a new era for the brand under Sharma's leadership. The company's been trying to win back goodwill from fans, but I'm not sure how cancelled PS5 ports and all-caps "XBOX" branding is going to stand up to the very real damage yet another round of job cuts is going to do.
