Microsoft and Riot Games are facing substantial layoffs, according to recent reports from various sources.
Both companies appear to be following recent trends in the tech industry, which has found itself in turmoil over recent months with downsizing and mass layoffs occurring at various companies across the US.
First reported by CNBC, Microsoft appears to be cutting 10,000 jobs in preparation for slower revenue growth. Last October, it had previously forecast the slowest growth period since 2016, which those at the company have held up as the main reason for this wave of departures.
Jason Schreier at Bloomberg was later able to secure additional information from sources at Microsoft, revealing in their own reports that these layoffs would be impacting Microsoft’s game division including Bethesda and 343 Industries. According to their reporting, 343 Industries was hit especially hard; this includes Joe Staten, the director brought onto the team in 2020 to help finish Halo Infinite, and much of the single player campaign team. The scope of damage done to Bethesda during the run up to Starfield's launch remains unclear.
In addition, Kotaku has also reported via their own sources that The Coalition, creators of the Gears of War franchise, have also been affected by these Microsoft Layoffs. Microsoft CEO Natya Nadella has addressed the 10,000 layoffs in a blog post, attempting to reassure the public that this "represents less than 5 percent of our total employee base".
The news has resulted in several major names in the games industry, many of whom formerly worked with Microsoft, to express their support and/or frustrations. Patrick Wren, former senior multiplayer designer on Halo and current senior encounter designer at Respawn tweeted the following:
“The layoffs at 343 shouldn't have happened and Halo Infinite should be in a better state. The reason for both of those things is incompetent leadership up top during Halo Infinite development, causing massive stress on those working hard to make Halo the best it can be.”
Rod Ferguson, who previously worked with Microsoft at The Coalition but has since become general manager of Diablo at Activision Blizzard, has called for those out of a job to reach out for a potential role.
Send 'em my way!— Rod Fergusson (@RodFergusson) January 18, 2023
But it’s more than just Microsoft taking a hit, according to reports from esports journalist Jacob Wolf, Riot Games is facing its own wave of layoffs. This currently appears to have impacted the human resources, support, and esports divisions of the company, with the full scope of damage done to the development teams still uncertain.
So what’s going on here? Well, as briefly mentioned at the start of this article, the whole tech sector is taking a massive hit. The reasons for this are numerous, and fingers can be pointed at a variety of factors including a possible recession on the horizon (or it’s already here, depending on who you ask), consumer spending habits from lockdowns, and the peak of the pandemic sticking around and affecting the bottom line. Or even the tech bubble bursting in a similar fashion as the .com bubble back in the 90s.
Whatever the reasons, the news regarding Microsoft and Riot Games' layoffs are the first major blow we’ve seen the games industry take during this whole tech fumble. It remains unclear whether this is only the beginning of a games industry layoff wave, or merely a tragic anomaly.