Last week Microsoft laid off almost 2000 people from its gaming division, a staggering 8% of that section's total workforce. People with families, dependents, mortgages. People who had maybe relocated for a job, or who were perhaps reliant on its health care.
The decision to terminate the employment of so many people must have been done as a last resort, right? Xbox--despite Microsoft's overall rosy health--must have been bleeding cash to make laying off almost 2000 people the only way to right the ship and return the brand to profitability, surely.
Nope! Microsoft just released its latest financials today, and while many of the numbers have been juiced by the timing of the Activision Blizzard takeover--where most of the layoffs were directed!--one thing was clear: Xbox and every other gaming-related division at Microsoft was making money.
If you're wondering why Microsoft made deep cuts in its gaming teams last week, one explanation might be that gaming, without the boost from the Activision deal, would be one of the slower-growing parts of Microsoft pic.twitter.com/WAlDVz8xsT
— Stephen Totilo (@stephentotilo) January 30, 2024
Gaming revenue was up 5% even if you ignore the Activision numbers! Xbox hardware revenue, years deep into a generation where they're in last place, was still up 3%! Xbox "content and services revenue"--Game Pass is probably most of this--was up 61%!
Microsoft CEO Satya Nadella on gaming in Q2, 2024:
— Tom Warren (@tomwarren) January 30, 2024
"This quarter we set all-time records for monthly active users of Xbox, PC, as well as mobile where we now have 200 million monthly active users, inclusive of Activision Blizzard King. With cloud gaming we continue to innovate…
This is a time and a wider economy where entire industries are in free fall, and Xbox is out here not just holding their own, but growing. And the people in charge still felt the need to lay off almost 2000 people, most of them coming from the places that accounted for the juiciest growth. There is no satisfying them! They don't just demand constant growth--itself an impossible task--they demand substantial constant growth, which is so far beyond impossible it's absurd.
No tears shed on the Microsoft earnings call. Company touts record revenues from the merger and better than expected results from Activision Blizzard while not mentioning laid off employees, referring only to things like "last week's announcement" and "cost disciplining." pic.twitter.com/xaUIHh6la6
— AmericanTruckSongs9 (@ethangach) January 30, 2024
This isn't business. It's cruelty. It doesn't matter how well your company is doing, the axe could fall on you at any time. The vulnerability being felt right now by workers across the entire video game industry isn't a quirk of the times, it's the point, and these executives are taking every possible opportunity to remind you of this.
