According to recent reports from various sources, Microsoft and Riot Games are facing a large number of layoffs.
Both companies appear to be paying attention to recent trends in the tech industry, which has been rocked by layoffs and mass layoffs at multiple companies across the U.S. in recent months.
CNBC first reported that Microsoft appears to be cutting 10,000 jobs in preparation for slower revenue growth. In October, it predicted it would be the slowest growth period since 2016, which company insiders believe is the main reason for the wave of departures.
Bloomberg’s Jason Schreier was later able to get more information from Microsoft sources, revealing in their own report that these layoffs will affect Microsoft’s gaming division, including Bethesda and 343 Industries. According to their report, 343 Industries has been hit especially hard; this includes Joe Staten, the director who joined the team in 2020 to help finish Halo Infinite, and most of the single-player campaign team. The extent of the damage done to Bethesda prior to Starfield’s launch remains unclear.
Additionally, Kotaku has also reported through its own sources that The Coalition, creator of the Gears of War series, has also been affected by Microsoft’s layoffs. Microsoft CEO Natya Nadella addressed the 10,000 layoffs in a blog post, trying to reassure the public that it was “less than 5% of our workforce.”
The news drew the attention of several prominent figures in the gaming industry, many of whom had previously worked at Microsoft, to voice their support and/or displeasure. Patrick Wrenformer senior multiplayer designer for Halo and current senior encounter designer for Respawn, tweeted the following:
“The 343 layoffs shouldn’t have happened, and Halo Infinite should be in better shape. Both of these things were caused by incompetent senior leadership during the development of H alo Infinite, giving credit to those working hard to make Halo the best it can be.” people put a lot of pressure on them.”
Rod Ferguson, who worked at Microsoft’s The Coalition but later became general manager of Diablo at Activision Blizzard, called on those out of work to find a potential role.
Send ’em my way!
— Rod Fergusson (@RodFergusson) January 18, 2023
But it’s not just Microsoft that’s reportedly being hit Esports reporter Jacob Wolf, Riot Games is also facing its own wave of layoffs. This appears to have affected the company’s human resources, support, and esports departments so far, with the full extent of damage to the development team still uncertain.
So what’s going on here? Well, as briefly mentioned at the beginning of this article, the entire tech industry is taking a huge hit. There are many reasons for this, and multiple factors can be pointed to, including a possible recession (or already, depending on who you ask), consumer spending habits as a result of the lockdown, and the peak of the pandemic lingering around and affecting bottom line. Even the tech bubble burst in a similar fashion to the dot com bubble in the 90s.
Whatever the reason, news of layoffs at Microsoft and Riot Games is the first major blow to the gaming industry that we’ve seen throughout the tech blunders. It’s unclear if this is just the beginning of a wave of layoffs in the games industry, or just a tragic anomaly.