Microsoft Layoffs: Firm Closes Several Xbox Studios; Hints Towards Multiple Job Cuts

Microsoft Layoffs: Tango Gameworks, known for developing "Hi-Fi Rush" and headquartered in Tokyo, is set to close its doors alongside Canada-based Alpha Dog

Microsoft Layoffs: Tech giant Microsoft’s Xbox division has announced its intention to close down several gaming studios, including Arkane Austin. This strategic move by Microsoft, which is reportedly due to a combination of financial underperformance and a shift in focus towards more profitable projects, places it among the ranks of other tech firms undergoing substantial restructuring efforts, particularly in response to the slowdown within the gaming industry.

Tango Gameworks, known for developing "Hi-Fi Rush" and headquartered in Tokyo, is set to close its doors alongside Canada-based Alpha Dog. This announcement was made by Matt Booty, the head of Xbox Game Studios, in an internal memo obtained by Reuters on Tuesday. Although the precise number of employees impacted has not been disclosed, Xbox has refrained from providing further details on the scale of the impending layoffs when questioned.

Booty stated that the decision to streamline operations and close certain studios are geared towards reallocating resources to enhance Xbox's game portfolio and foster new intellectual property. This strategic "reprioritisation of titles and resources" highlights Microsoft's dedication to innovation and fostering future growth within the gaming sector.

All the impacted studios fall under ZeniMax Media, which Microsoft acquired in 2021 for $7.5 billion, along with Bethesda. Despite these closures, Microsoft's Xbox content and services segment recorded a significant 62 per cent increase in third-quarter revenue last month, largely attributed to the acquisition of Activision Blizzard.

The news of studio closures mirrors recent industry trends. Take-Two Interactive also announced the closure of two subsidiary studios as part of a broader restructuring effort, as reported by Bloomberg News last week. Earlier this year, Microsoft initiated extensive layoffs, affecting 1,900 employees across Activision and Xbox. Following the closures, certain developers from Arkane Austin are likely to transition to other studios within the Bethesda ecosystem, where they will contribute to ongoing projects like the "The Elder Scrolls" and "Fallout" franchises. 

The game "Redfall," developed by Arkane, will remain operational, guaranteeing seamless gameplay experiences for players without interruption.