- Microsoft will fire 5,500 employees in a new round of layoffs.
- Around 2.5% of the company’s staff, including developers at Xbox studios, will be affected.
- Increased spending on AI is a major reason behind these layoffs.
The entire gaming world is expecting a massive round of layoffs at Xbox, thanks to the rumors circulating over the past few weeks. Parent company Microsoft is no longer willing to subsidise the gaming giant and will try to offload studios to make up for losses.
However, the Xbox division is only a small part of what will transpire at Microsoft, as the tech company is apparently looking to lay off a sizeable portion of its staff next week.
Why it matters: Even though this round of layoffs is somewhat smaller, constant job cuts amidst the rise of AI don’t paint an exciting picture of the future.
As reported by Business Insider, Microsoft is set to cut around 5,500 jobs, including those at Xbox, in a new round of layoffs. Less than 2.5% of the company’s 220,000-employee workforce will be affected by this next week, although the exact timing of the layoffs could change.
The report states that Microsoft is making this move to control costs as its spending on AI keeps increasing. Moreover, developers from the Xbox division, alongside sales and consulting employees, will be among the thousands affected by the job cuts.
Even though the 5,500 figure does sound daunting, this round of layoffs will actually be much smaller than last year, when Microsoft fired a whopping 15,000 employees in the span of two months. The company’s voluntary retirement program, which was taken by one-third of the eligible employees, is the main reason these job cuts aren’t as cruel.
Regardless, as companies keep increasing investment in AI, layoffs at such a massive scale are becoming a common theme in both gaming and tech ecosystems. With AI still not reaching the wide adoption it needs for sustainability, it seems like employees will remain vulnerable in the near future.
Do you think companies are making the right bet on AI? How long are these massive job cuts going to continue? Tell us in the comments below or head to the Tech4Gamers forum for discussion.
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Shameer Sarfaraz has previously worked for eXputer as a Senior News Writer for several years. Now with Tech4Gamers, he loves to devoutly keep up with the latest gaming and entertainment industries. He has a Bachelor’s Degree in Computer Science and years of experience reporting on games. Besides his passion for breaking news stories, Shahmeer loves spending his leisure time farming away in Stardew Valley. VGC, IGN, GameSpot, Game Rant, TheGamer, GamingBolt, The Verge, NME, Metro, Dot Esports, GameByte, Kotaku Australia, PC Gamer, and more have cited his articles.
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