Microsoft Cuts 9000 Jobs to Invest in AI
Microsoft has carried out another massive layoff, laying off about 9000 employees — that’s about 4% of the total staff. According to The Seattle Times, the reason is an aggressive increase in investment in AI infrastructure. The company plans to spend over $80 billion on AI in 2025, which is $25 billion more than the previous year.
Although rumors of “replacing humans with AI” turned out to be exaggerated, Microsoft's strategy is clearly aimed at sharply reducing costs. This is especially noticeable against the backdrop of gaming divisions, where dismissed developers complain about the closure of promising projects. In particular, The company canceled the online shooter from ZeniMax Online, despite Xbox boss Phil Spencer personally praising the prototype in March. The game, codenamed Project Blackbird, was supposed to be released in 2028.
It also continues to raise questions last year's closure of Tango Gameworks, the studio behind the successful Hi-Fi Rush. Analysts believe that Microsoft overestimated the subscription potential Game Pass, betting on a model that is less successful in the gaming industry than music or TV series.
Despite the acquisitions of Activision and Bethesda, subscriber growth fell well short of expectations, leading to tighter controls on budgets and a move away from expensive gaming initiatives in favor of AI priorities. The developers who lost their jobs see this as a major blow to Xbox's ambitions and the industry as a whole.
