Microsoft will lay off about 1,000 employees, the company confirmed Tuesday.
Although it is not confirmed if the layoffs are isolated in gaming divisions, employees who work for Xbox and other Microsoft-owned studios said they were being laid off, the Washington Post reported. Axios first reported the layoffs Monday evening.
Microsoft declined to disclose if any employees based in the Seattle area have been affected by the layoffs, although one Microsoft employee who tweeted about being laid off said they worked at the Redmond campus. In a statement, a company spokesperson said Microsoft makes structural adjustments as needed.
“Like all companies, we evaluate our business priorities on a regular basis,” the spokesperson said. “We will continue to invest in our business and hire in key growth areas in the year ahead.”
This is the second round of layoffs at Redmond-based Microsoft this year. 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 a weakening economy. July’s layoffs were across several groups, including consulting and customer and partner solutions. It joined tech giants Meta and Google in slowing 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 maker of 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 disclosed in an August antitrust filing that Sony’s PlayStation 4 outsold Xbox One by double.
Even though gaming saw a pandemic bump, video game companies including Nintendo, whose US operations are based in Redmond, reported declining revenue this year.
Microsoft missed the mark on its fourth-quarter earnings report and reduced its revenue forecast. The company cited macroeconomic challenges such as a strengthening dollar, the ongoing war in Ukraine, and manufacturing shutdowns in China that hamstrung PC production as the source of its underperformance.