Xbox Planning Additional Layoffs After Studio Closures: Report

Xbox Layoffs with a picture of Hi-Fi Rush
Image courtesy: Tango Gameworks/Hi-Fi Rush
In Short
  • A new report claims that Xbox is planning further rounds of layoffs even after the recent closure of three game studios.
  • Xbox president Matt Booty in a town hall meeting claimed that the understaffed nature of the ZeniMax studios prompted the restructuring.
  • Furthermore, the Xbox team claims that the reorganization will help ZeniMax to focus better on fewer projects.

Earlier this week, Microsoft sent shockwaves through the gaming community when the Xbox team revealed that it was closing three prolific studios, including Arkane Austin, Tango Gameworks, and Alpha Dog Studio. The gaming community was justifiably upset after the news surfaced. However, it seems that is only the tip of the iceberg, as Microsoft is planning more layoffs as part of the ongoing restructuring efforts at Xbox.

As per Bloomberg’s Jason Schrier, Xbox’s cost-cutting measures aren’t done yet. This week, Xbox has offered voluntary severance agreements to producers, QA testers, and other ZeniMax staff. Additionally, others were also informed that further layoffs are planned at Xbox. This is quite a baffling situation as Xbox previously acquired ZeniMax, the parent company responsible for studios developing Starfield, Fallout, Dishonored, and more, for $7.5 billion in 2020.

Outside of that, more news surfaced about the closure of three studios under ZeniMax. At a town hall meeting, Xbox president Matt Booty spoke about the shutdown. He cited how the three studios that were shuttered were understaffed, resulting in the leadership taking the unfortunate decision to free up resources for other projects.

These decisions were not connected to the sales of either Hi-Fi Rush or the commercial flop Redfall (review). Jill Braff, head of ZeniMax Studios, claimed this reorganization will help ZeniMax to focus better on fewer projects.

As per Schreier’s internal sources, Arkane Austin and Tango Gameworks were looking to hire new employees. They were also pitching their game ideas to the higher-ups. Arkane Austin specifically pitched for a single-player immersive sim title. If this is true, the news of the layoffs becomes even saddening.

Keeping my personal feelings aside, it doesn’t make sense no matter how you look at this news. On the one hand, Xbox executives have praised Hi-Fi Rush over the moon and even mentioned their commitment to Redfall. On the other hand, we saw studio closures last week even though they were trying to hire new people and pitch for their next project; something that Xbox executives should be excited about.

Wasn’t the whole point of buying ZeniMax and their studios to nurture Xbox’s gaming division and provide memorable experiences to gamers? So, who is benefitting from the layoffs and three studio closures? Alas, only Xbox can answer these questions. Let us know your thoughts in the comments below.

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