Satya Nadella speaks about layoffs in Xbox and reaffirms his bet on artificial intelligence

The CEO of Microsoft thanks the affected employees and points out that the future goes through AI.

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Following the significant restructuring that has shaken Xbox and other Microsoft divisions in recent weeks, CEO Satya Nadella has published a new statement aiming to set the course for the new fiscal year. His words come after several thousand layoffs that have generated concern among employees, press, and community.

In his address, Nadella acknowledges the human impact of this decision and thanks those who have lost their positions. However, he also takes the opportunity to emphasize that artificial intelligence is now one of the group’s top strategic priorities, reinforcing the direction Microsoft has been taking for over a year.

Nadella Thanks Laid-Off Employees and Doubles Down on AI Bet

“First and foremost, I want to talk about what has been weighing on me,” Nadella begins in his internal message. “These decisions are among the most difficult we have to make. They affect people we’ve worked with, learned from, and shared so many moments with.” The CEO insists that the contributions of all laid-off employees have helped shape what Microsoft is today, and for that, he expresses his “deep gratitude.”

What Happened:

The massive layoffs in Xbox have left a bleak landscape in numerous development teams and key departments. Everwild, Rare’s ambitious project, has been canceled after over a decade of work, while Perfect Dark also falls by the wayside with the complete closure of The Initiative. Other studios like ZeniMax Online and ZeniMax Europe have suffered cancellations and cuts, and the situation is no better on the Call of Duty front, where both Raven Software and Sledgehammer Games have lost part of their staff.

The hardest hit has been Turn 10 Studios, responsible for Forza Motorsport, which has seen its staff reduced by half. King (Candy Crush), High Moon Studios, and various internal Microsoft teams in the US have also been affected, including marketing departments and executive positions. According to a memo signed by Phil Spencer and Matt Booty, the new strategy aims to prioritize resources and focus efforts on key projects, discarding everything that doesn’t align with Xbox’s current objectives.

However, the focus of the speech soon shifts. Nadella mentions that the group will continue to firmly bet on AI-driven transformation, pointing out that it will be one of the main axes for growth and competition in the future. “We’re doubling down on our focus on the fundamentals, while continuing to define new frontiers in AI,” he concludes. For now, many eyes remain fixed on how this will affect the future of Xbox as a platform and brand.