Earlier this week, Microsoft announced that it was laying off 9,000 jobs globally. These cuts have led to the cancellation of three games, the gutting of the Forza studio, and the closure of another. Now, CNBC has reported that 830 of the jobs that were cut were in Microsoft’s home state of Washington, according to a document Microsoft submitted to Washington employment officials..
Alarmingly, this is not Microsoft’s first layoff round this year, it also reduced numbers by 6,000 in May and by 300 in June. That means that 15,300 jobs have been axed so far this year, and it may not be the last of the cuts. Notably, this is the second-largest layoff round that Microsoft has ever made.
The cuts in Washington affected game design, audio designers, mechanical and optical engineers, lab technicians, Microsoft Research, lawyers, and hardware engineers. The sales team and government affairs staff were also affected. Xbox’s CEO Phil Spencer said in an internal memo that the company was trying to remove layers of management to boost agility.
Microsoft is trying to create a less hierarchical organization where engineers are no longer separated from the leadership by an army of managers. It is interesting though how Microsoft keeps peddling the notion that AI won’t replace humans, but will complement them, and at the same time is making massive cuts to its labor force.
The cuts at Microsoft coincide with the company’s new fiscal year, which began on July 1. Now is the best time for Microsoft to make the cuts as it allows the company to reset its workforce and budget in alignment with its new priorities.
The layoffs earlier this week came against the backdrop of an unexpected decline in US private sector payrolls in June. The US private sector saw jobs decrease by 33,000 while economists had predicted an increase of 100,000.
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