Microsoft has confirmed that they plan to lay off 10,000 employees across the company including from their gaming divisions like Xbox and Bethesda.

The reason given for this is economic uncertainty with Microsoft CEO Satya Nadella saying in a Memo to staffers that the layoffs were a result of the global economy weakening overall.

“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. At the same time, the next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform”.

Nadella further says that the cuts will make up less than 5% of the company’s overall workforce and that the total workforce layoffs will be complete by the third quarter of Microsoft’s fiscal year.

“First, we will align our cost structure with our revenue and where we see customer demand. Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3. This represents less than 5 percent of our total employee base, with some notifications happening today. It’s important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas. We know this is a challenging time for each person impacted. The senior leadership team and I are committed that as we go through this process, we will do so in the most thoughtful and transparent way possible”.

In terms of Gaming, while no reports have confirmed which departments of Microsoft were most affected by the layoffs, Bloomberg’s Jason Schreier says that both Xbox and Bethesda have seen recent job cuts with 343 Industries, in particular, being “hit hard”. 

The scale is not yet clear, but Bloomberg has so far confirmed job cuts at Bethesda Game Studios (Starfield) and 343 Interactive (Halo). A Microsoft spokesperson declined to comment on how many employees of the gaming division were laid off

— Jason Schreier (@jasonschreier) January 18, 2023

Sadly layoffs have been quite frequent throughout the tech sector in recent months. CNN points out that Amazon is planning to lay off 18,000 people and Facebook’s parent company Meta will also be holding 11,000 job cuts. This will be the largest in the company’s history.

Like with Microsoft, the reason for these job cuts at the start of the year is the increase in global inflation causing a decrease in the number of people spending on more premium goods.