
They say that AI could eventually replace the jobs done by humans. For some employees at Microsoft and its gaming division, that future is here, as it has been hit with 9,000 layoffs. This is according to a report from Bloomberg and a letter sent by Xbox head Phil Spencer that was seen (and authenticated) by Windows Central.
Microsoft gaming division layoffs
According to the email sent by Spencer, Microsoft will hit its gaming division with layoffs. “Today we are sharing decisions that will impact colleagues across our organization. To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organizational shifts will be shared by your team leaders in the coming days.”
The Bloomberg report suggests that Microsoft’s King division, the company behind the Candy Crush franchise, is planning 10% layoffs, which would affect about 200 employees. Microsoft’s other European gaming offices are expected to face similar cuts, while Microsoft’s US divisions will be informed later.
Microsoft previously confirmed it would be laying off about 3% of its global workforce. Now, we know that some of it will come from its gaming division.
AI to blame?
So, what’s with these layoffs? For starters, many companies are still trying to scale back on employees. Many went on a hiring spree during the pandemic and are now finding that they overhired. Also, it seems that AI has a role to play.
Like many other tech giants, Microsoft is investing heavily in AI. The company is expected to spend as much as $80 billion on data centers used to train AI models. This means that Microsoft’s priority for the foreseeable future is AI and less about gaming.
The Redmond company isn’t alone in prioritizing AI either. Even at Meta, the company announced a restructuring. It is planning the formation of a “superintelligence” AI group led by Scale AI’s co-founder, Alexandr Wang.
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