Microsoft Corporation has announced that it will be laying-off 10,000 people, around 4.5% of its total workforce, by the 31st of March 2023. Microsoft claims that the move is “in response to macroeconomic conditions and changing customer priorities” and a weakened global economy. Despite these claims, Microsoft is still proceeding with the $69 billion acquisition of Activision Blizzard, it has also acquired five other companies in 2022.

Microsoft Corporation also hosted an event at Davos, Switzerland which was attended by around 50 top-level execs where it had Gordon Matthew Thomas Sumner, also known as Sting, perform. The theme of the event was sustainability and the event took place just one day before Microsoft confirmed that it would be cutting its workforce. Whilst Microsoft were not the only tech firm at Davos, many employees have criticised the company for hosting a Sting concert before layoffs. Phil Spencer, CEO of Microsoft Gaming, also spoke about the importance of game companies uniting people instead of dividing them and how gaming must be used to bring joy just hours before the layoffs were announced.

Several employees at Xbox and Bethesda have also confirmed that there are significant layoffs in the gaming divisions with 343 and The Coalition both impacted. Developers working on the upcoming flagship game from Bethesda, Starfield, were also impacted by the layoffs. Employees at Microsoft have taken to social media to criticise the company, calling leadership at Xbox “incompetent” and claiming that management contradicts even its own policies. Joe Staten, who was brought into 343 to save Halo Infinite, has also been removed from the studio and will reportedly join Xbox Publishing. Several developers working on the singleplayer content for Halo have also been let go.

Bluepoint, Bungie, Nintendo and several PlayStation Studios teams have reached out to those impacted on the gaming side to apply for positions at their respective studios. The scale of the layoffs on Microsoft’s gaming side has yet to be fully seen. This is the second significant round of layoffs at Microsoft, in October 2022 the company laid off 1000 employees. The Xbox team was also impacted then.

Here’s what Satya Nadella, CEO of Microsoft, had to say to employees:

These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts. We’re living through times of significant change, and as I meet with customers and partners, a few things are clear First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less. We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.

When I think about this moment in time, the start of 2023, it’s showtime—for our industry and for Microsoft. As a company, our success must be aligned to the world’s success. That means every one of us and every team across the company must raise the bar and perform better than the competition to deliver meaningful innovation that customers, communities, and countries can truly benefit from. If we deliver on this, we will emerge stronger and thrive long into the future; it’s as simple as that.

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