This was the “turn” that the Xbox CEO was referring to: 3,200 layoffs and abandonment of 4 development studios

It seems that the “pivot” that the new CEO of Xbox, Asha Sharma, had in mind to “reset her business”, will be nothing more than massive layoffs that will leave more than 3,200 people without jobs, following Microsoft’s own policy of laying off thousands of workers.

The first 1,600 workers that the new CEO will throw out will have to leave the company today after a statement that the head of the division has made public directly on Twitter (x).

These layoffs are accompanied by nothing more and nothing less than the abandonment of four game development studios.

The company openly admits that its current business model is failing, operating with profit margins much lower than those of the competition and dragging a generation start weighed down by a cost structure that is too high added to the current hardware crisis.

The aggressive purchase of studios in recent years without a viable plan has been a burden for the company. The company recognizes losses of 64 cents for every dollar invested. Compulsion Games and Double Fine Productions will once again be independent studios preserving its intellectual properties. On the other hand, Ninja Theory and Undead Labs pass into the hands of new owners with funding secured to finish current projects like Senua and State of Decay 3.

The cuts will also affect other major companies in the company such as Activision, Blizzard or Bethesdaalthough they assure that no games already announced will be cancelled.

Among the justifications for these layoffs, the CEO of Xbox complains that Game Pass did not grow at the expected rate (after increasing its price by 50%)

The statement, however, seems full of excuses and blaming external actors and goes on to say that Game Pass and its multiplatform strategy did not grow at the “expected pace”, without mentioning that They raised the price by 50% last year. Announce a few days ago a rise in the price of their consoles It doesn’t seem like it’s going to help reverse the situation either.

Furthermore, let us remember that

They have also blamed competition for “publishing too many games per month” and having to compete with small studios, saying that “it is not possible or desirable to own every major independent studio.”

Another excuse has been the “internal bureaucracy”, claiming that they have found themselves with 14 layers of managers and a growth of 40%. However, this accumulation of personnel is the direct fault of the numerous acquisitions of companies and studios, decisions made by managers and which will now cost 3,200 people their jobs.