According to Bloomberg’s Jason Schreier, Xbox is currently preparing to hold major layoffs in the month of July and although the overall size and scope of the job cuts are unknown as of right now, the layoffs are expected to take place after the end of Microsoft’s fiscal year on June 30. In addition, Xbox is planning to cut down drastically on budgets for marketing and some other areas of their business, based on the report.
Also, in a recent mail sent to all employees, Xbox CEO Asha Sharma has pointed out that their “accountability margin”, which is a term used to indicate the company’s profit margin, has decreased by 3%.
“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 said that in order to move forward in a sustainable way, Xbox needs to go through a complete re-assessment in how to do business which will be reflected in many of it’s fields.
“We expanded our studio system when we needed a pipeline of content to meet multiple strategies across subscription, streaming and devices,” she stated.
“In the process, we have found ourselves over extended as we executed on changing strategies in a landscape of more readily available content. We are the fortunate stewards of industry-defining franchises that have enormous potential and player demand, but we have not adequately funded them to compete and win. At the same time, as we saw this past weekend at Showcase, a reliable pipeline of first- and third-party exclusives and new IP are critical to our success. We need to reassess the balance between these and our investment priorities for the next 5 years.”
You can read the full memo that was sent to all employees of Xbox, in the official blog post titled “Next 100 Days: Xbox Reset”.
However, it feels a bit unfair that whenever there’s a large-scale adjustment or restructuring of any kind in huge corporations like Microsoft, it’s the employees who end up paying for it in the form of unfortunate layoffs and job cuts.
