The company confirmed on Tuesday that Microsoft will lay off about 1,000 of its employees.
Employees at Xbox and other Microsoft-owned studios said they were laid off, although it wasn’t confirmed whether the layoffs were isolated in the gaming divisions, the Washington Post reported. Axios first reported the layoffs Monday evening.
Microsoft declined to disclose whether any employees in the Seattle area were affected by the layoffs, although a Microsoft employee who tweeted about the layoff said he was working on the Redmond campus. A company spokesperson said in a statement that Microsoft is making structural adjustments as needed.
“Like all companies, we regularly evaluate our business priorities,” the spokesperson said. “We will continue to invest in our business and recruit in key growth areas over the coming year.”
This is the second round of layoffs this year at Redmond-based Microsoft. The first was before its annual earnings report in July, when the company cut jobs, citing structural adjustments. And since May, Microsoft has been slowing hiring due to the weakening economy. The layoffs in July took place among various groups, including consulting and client and partner solutions. It has joined tech giants Meta and Google to slow hiring.
The company’s workforce still grew overall. Microsoft had 221,000 employees as of June 30, compared to 181,000 last year.
Microsoft is in the process of acquiring video game maker Activision Blizzard for $69 billion, pending UK regulatory approval. Microsoft is also the manufacturer of the Xbox and owns other studios such as Bethesda, a subsidiary of ZeniMax Media. It acquired ZeniMax last year for $7.5 billion in cash.
The company revealed in an antitrust filing in August that Sony’s PlayStation 4 has sold twice as much as the Xbox One.
While gaming has seen a pandemic surge, video game companies including Nintendo, whose US operations are in Redmond, have reported falling revenues this year.
Microsoft missed the target in its fourth-quarter earnings report and lowered its revenue forecast. The company cited macroeconomic challenges as a stronger dollar, the ongoing war in Ukraine, and production cuts in China that hampered PC production as the source of its poor performance.