Xbox recently announced that 200 developers from King, who were laid off earlier this month, will be replaced by AI technology. An internal memo revealed this move as part of a broader reorganization aimed at simplifying the company’s structure and boosting efficiency.
The memo, shared with Mobile Gamer Biz, explained the reasoning behind the layoffs and AI integration. It states that the gaming industry is evolving rapidly while the business itself has struggled with growth.
“The industry is changing fast, and our business has not been growing,” the memo reads. “We must look both outside, at competitors and the market, and inside the company. We’re making several changes to get the business back to growth. Unlocking many more AI tools is one recent example.”
The plan involves reducing layers of management, eliminating overlapping roles, and limiting the number of meetings and stakeholders per project. This reorganization aims to make the company smaller and more agile, with some new roles created but overall, fewer employees.
Microsoft’s Xbox division has been hit hard in recent months, with around 9,000 jobs affected in the latest round of layoffs, the fourth wave in 18 months. Several studios and projects have been shuttered as part of these cost-cutting measures.
Xbox CEO Phil Spencer acknowledged the challenges in a staff email, praising the team’s success in growing player numbers and gaming hours but emphasizing the need to increase “agility and effectiveness” through these tough decisions.
