Why Did Microsoft Cut 9,000 Jobs This Year?

[Music] So quick like update. This is not a correction, but Microsoft did start their layoffs as Jason Shriers predicted. They say that they will cut about 9,000 jobs or about 4% of its workforce across all kinds of teams, roles, and geographies. This follows on another layoff of 6,000 people that were was announced in May. So, so far all we've seen is about 200 people from King. 10% of that workforce have been laid off. And there's some rumors about Zenamax. We just got word breaking breaking news, baby. They canled one of their MMO projects in development. Bethesda, that sucks. I love MMOs. I wish there would be more of them. What are you talking about? What happened to all your genre analysis? Just goes out the window. I want MMO Iceland. No, it's Finland and Iceland. It's cooperation. Anyway, so we should get more details in

the next week about what the actual implications are. The head of Xbox wrote a note or letter to their staff that, you know, these are big changes, sweeping changes across Microsoft and and gaming will be impacted almost every every every area. So, we shall see as Microsoft continues to deteriorate. Microsoft also has 230,000 employees. So, just for context, I think it's good to understand. Do you remember when Phil Spencer said that mobile was why they bought King Blizzard Activation? Do you remember when he said that? That was such I loved it. All right, sorry. Continue. Moving on. So, more Xbox stuff. So, a founding Xbox team member, Laura Frier, who has been on YouTube for a while, she basically helped launch the Xbox and produce the original Gears of War. She spoke out on YouTube like a few days ago, right after I wrote my little piece, basically suggesting that Xbox hardware is dead and that, you know, Microsoft's lost its interest or ability

to build hardware. Instead, they're rejecting, you know, all their focuses on Game Pass and partnerships and third party hardware like the Rogue Ally. She's being very blunt but very nice about it, but she thinks that this really sad and what she built has been eroded by the current management and that these like rogue type things, these all these things that they're doing are really just have little attraction to the customers. Now, obviously Laura's making the same argument as me, so I think she's right, but she's certainly a lot nicer about it, you know, and the fact that the Xbox Anywhere is kind of the wrong strategy, which is kind of what I've been saying, but particularly from the Game Pass perspective. But anyway, what her point really is, and one of the points I want to make, without new hardware and like a reason to buy the Xbox, they're just putting this whole platform at risk. Like their identity is going to dissipate. And that's the big challenge. And so, I think some of the push back I would get on my article as well as what Laura would get is that we are just too old

school and that we don't want things to change. And that's super fair. I agree with that. But I still would make the same argument that Microsoft has basically been on a losing strategy for this entire generation and the Game Pass is the primary means why that is. And that's not necessarily their fault. It's basically the way Microsoft has been pushing them. But they are absolutely getting annihilated by Nintendo and Sony. There's no denying that. So something needs to change because where they're going right now is not happening. But I think it's worth listening to her talk about it from an insider perspective because she was part of the organization and part of the people that brought the Xbox to the masses. So, is there a way for Microsoft to correct or is this a doom loop that they can't get out of? Well, it's kind of a doom loop and and the further they go down that loop, they're just not going to be able to pull themselves out of until, you know, that's the way it seems anyway because this is not the right strategy. I'll admit though, like even if they were to do what I'm suggesting, I'm not saying that they're going to be successful with that. I think that's very very challenging to compete head-to-head with Sony and Nintendo on content and

hardware, right? But I think that has at least more potential for success than where they're headed right now. And do you think the Activision acquisition was a mistake given like what has happened since? I've said that way back then. It was the worst thing for the industry. Absolutely the worst thing for the industry to for Xbox. It didn't make sense because it was basically bringing this all this great content to a money losing subscription, right? So, it just devalued the entire content library of Activision. And again, we're going to just see a death of a thousand cuts. It's going to be continual reductions in headcount and damage to all these IPs, you know, including Call of Duty most likely. Do you think they will change the leadership at some point? Well, I Yes. Phil Spencer's time has come and gone, right? He should have been out a while ago. He's a really nice guy, but he's not suited to manage this type of complex organization. I think

they Yeah, they definitely need to do leadership. Um, but maybe they don't because, you know, he's just going to do what the Microsoft overlords want. I mean, that's what he's been good at, right? Yeah. I always remember because because like not a long time ago, Phil Spencer kind of showed his playing times. It was like 917 hours over 82 games that he played. He's beloved. He is absolutely beloved. He's a real gamer. Absolutely. But that's not the type of person you need to be leading Xbox right now. You need Bobby Cotch is what you really need. Someone like that. You know, you should bring him back. Get him back out of retirement, dude. Cuz this is what this is that that's the type of person you need in order to get these guys back on track. That's what and he's chomping at the bit like He wanted to acquire Tik Tok. Like he's Bobby Kotek. Yeah. Yeah. Yeah. He was on some podcast talking about that. Yeah. Yeah. He's down in some mansion just thinking about how he can come back with a vengeance. Tell Tell me this though. Let's say I'm a buyer. I'm looking to make acquisitions. Do I just wait like as a vulture to see

to see what carcass is left by Microsoft? Do I actively approach Microsoft and start making offers for things like if you're savvy? I mean, why? Yeah. Why can't I stay? I would like to make an offer for Halo right now. I mean, why why not? Like, they already have Pokemon. Like, why not add another jewel to the gauntlet? Microsoft won't sell it in pieces. No, you don't think so? No. Do you think it's worth throwing an offer out there? Like, you think they're going to start accepting feelers? I think what it'll get down to is that they're always stalking these BD guys. you won't be a able to acquire teams or IP, but you could acquire cold teams out of Microsoft, right? So, so a Bethesda team, Call of Duty team, like I think that's definitely possible in the medium term, like in the next two or three years that that's going to it's going to get so bad that they're going to have to do that, right? Since they're really not taking care of their teams or their IP. That's possible, but you still don't get Call of Duty. You don't get any of the the actual IP own Blizzard

stuff, whatever. You know, we saw this happen at Blizzard. This is not like when big companies acquire other companies, it doesn't necessarily work. Like the entire creative organization around Blizzard left within like four or five years after the acquisition, you know. [Music]