Microsoft will lay off around 1,000 employees, the company confirmed on Tuesday.
While it has not been confirmed whether the layoffs are isolated to gaming divisions, employees working for Xbox and other Microsoft-owned studios said they were laid off, the Washington Post reported. Axios first reported the layoffs Monday night.
Microsoft declined to disclose whether any employees based in the Seattle area have been affected by the layoffs, although a Microsoft employee who tweeted about being laid off said they worked at the Redmond campus. In a statement, a company spokesperson said Microsoft is making structural adjustments as needed.
“Like all companies, we periodically evaluate our business priorities,”[ads1]; the spokesperson said. “We will continue to invest in our business and hire in key growth areas in the coming year.”
This is the second round of layoffs at Redmond-based Microsoft this year. The first was before the annual earnings report in July, when the company cut jobs citing structural adjustments. And since May, Microsoft has slowed hiring due to a weakened economy. Juli’s layoffs were across several groups, including consulting and customer and partner solutions. It joined tech giants Meta and Google in slowing hiring.
The company’s workforce continued to grow overall. Microsoft had 221,000 employees as of 30 June, compared to 181,000 last year.
Microsoft is in the process of buying video game maker Activision Blizzard for $69 billion, pending approval from British authorities. Microsoft is also the manufacturer of the Xbox and owns other studios such as Bethesda, a subsidiary of ZeniMax Media. It bought ZeniMax last year for $7.5 billion in cash.
The company revealed in an antitrust filing in August that Sony’s PlayStation 4 sold twice as much as the Xbox One.
Even as gaming saw a pandemic, video game companies including Nintendo, whose US operations are based in Redmond, reported falling revenue this year.
Microsoft missed its fourth-quarter earnings report and cut its revenue forecast. The company cited macroeconomic challenges such as a strengthening dollar, the ongoing war in Ukraine and production shutdowns in China that hampered PC production as the source of the underperformance.