Microsoft is cutting 605 jobs at its Redmond headquarters as part of a sweeping overhaul of its Xbox division, according to a WARN notice filed this week. The cuts take effect Sept. 4 and are part of a broader plan to eliminate roughly 3,200 positions company-wide over the next fiscal year. A process that already kicked off with about 1,600 layoffs Monday.
Xbox leadership said the restructuring follows a stretch of weak growth and thin margins across the gaming business, with the division reportedly operating at profit margins several times lower than comparable platform and publishing companies. As part of the shake-up, four studios. Compulsion Games, Double Fine Productions, Ninja Theory and Undead Labs are being spun off to independent ownership or new owners. In France, Arkane’s leadership has entered required consultations with its Works Council over its future. Despite the cuts, Microsoft says no announced games are being canceled.
The company also plans to flatten its management structure significantly, cutting management layers from as many as 14 down to five, while trimming vendor spending in half. Helen Chiang has been promoted to the newly created role of Chief Operating Officer overseeing Xbox’s content, hardware, platform and services divisions, while longtime Xbox executive Dave McCarthy is retiring after 17 years with the company.
