Massive layoff at Xbox division – closes studio

January 23, 2009

Xbox division recieve major job cuts - closes studio Microsoft recently announced that the company would be laying-off 5,000 employees due to a drop in profits. This is the first mass layoff in the history of Microsoft. However, news has trickled out that the Xbox division will be suffering the brunt of the job cuts.

Word has been trickling out that the Entertainment and Devices Division (EDD) will receive the brunt of the mass layoff. The EDD division consists of the Zune, PC gaming and the massive Xbox division. The EDD is headed up by the well known faces: Shane Kim, Don Matttrick, Phil Spencer and the friendly Aaron Greenberg.

Word has come out that Microsoft owned site, Gamerscore Blog has ceased operation. Many of the former employees have revealed that all of the writers have been laid off.

Also, notorious VentureBeat writer Dean Takahashi, revealed that approximately 30 percent of Microsoft’s internal video game testers have been laid off. What in the world is Microsoft thinking by laying off quality assurance testers for the video game division?

The journalist also stated that the game division will receive a massive management restructuring next week. In the corporate world, management restructuring usually means firing and consolidating. Could this be the end of Aaron Greenberg? I sure hope not.

Microsoft also announced today that the company will be shutting down one of its longest running game studio, ACES. The studio has been responsible for various franchises such as long time veteran, Flight Simulator.

According to Microsoft the decision to shut down the studio was made in order “to align our[Microsoft’s] people against our[Microsoft’s] highest priorities.” Obviously the highest priority for Microsoft is Windows.

I have talked about Microsoft’s shift towards the casual market and these events seem to indicate that the change will not be gradual but possibly abrupt. There is also some indication from Microsoft that the company wants to focus more on its core business such as Windows. This is in contrast to Sony who is laying-off employees in its core businesses and leaving the gaming division alone (for now). Could we see a leaner Xbox division by next month?


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