Xbox and Embracer’s mass layoff explanations aren’t good enough

The wave of layoffs that has happened over the past year in the video game industry is well-documented. Some of the biggest culprits are Embracer Group, which has laid off nearly 1,400 workers across several of its studios since the start of a restructuring program last July, and Microsoft, which laid off 1,900 developers across Xbox, Bethesda, and Activision Blizzard in January. After relative silence around these layoffs, leadership at both companies finally tried to offer more transparently into what happened.

Neither of their statements are good enough.

While both Embracer Group CEO Lars Wingefors and Microsoft Gaming CEO Phil Spencer tried to sound more compassionate about letting go so many developer, those sentiments lack meaning when their focus is still on infinite growth and profitability. There’s a disconnect between the workers and the leadership at these companies, one that these lacking statements have begun to unveil.

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Lars Wingefors’ statement

Embracer Group entered a restructuring program last summer when investment, reportedly from the Saudi Arabia-backed Savvy Games, fell through. The conglomerate had spent years acquiring a wide variety of IP and studios, but has now been shutting studios down, canceling projects, and laying off workers to make up for this lack of expected cash flow.

“In a groupwide effort, our companies and studios have had to make difficult decisions, particularly on having to part ways with team members,” Embracer’s third-quarter 2023 interim report, attributed to Wingefors, states. “In total, we have reduced our global headcount by 8% of the workforce since the start of the program. The reductions are managed locally on the operative group level, with a focus on informing affected