Xbox's Phil Spencer is "concerned" about the lack of growth in the gaming industry following layoffs

by Danny Craig ·

Microsoft

After mass layoffs swept the industry in the first few months of 2024, Microsoft Gaming CEO Phil Spencer stated that he is "concerned" about the "lack of growth" as a whole, which resulted in the layoffs of 1,900 employees across Activision and Xbox.

The details:

Spencer spoke with Polygon about the thousands of job cuts that have occurred this year alone, affecting approximately 8,000 workers, and how he is most concerned with the industry's overall growth. "I'll say the thing that has me most concerned for the industry is the lack of growth," Spencer said. "And when you have an industry that is projected to be smaller next year in terms of players and dollars, and you get a lot of publicly traded companies that are in the industry that have to show their investors growth - because why else does somebody own a share of someone's stock if it's not going to grow? - the side of the business that then gets scrutinized is the cost side. Because if you're not going to grow the revenue side, then the cost side becomes challenged."
The CEO then reflected on Microsoft Gaming's January layoffs, which resulted in 1,900 employees being let go, and questioned how to return to the level of growth seen before 2022. "We're a business. I've said over and over," he said. "I don't get any luxury of not having to run a profitable growing business inside of Microsoft. And we are that today. But... I reflect on friends of mine in the industry that have been displaced and lost their jobs and how just, I don't want this industry to be a place where people can't, with confidence, build a career. So that's why I keep pivoting back to: How does this industry get back to growth?"
Since 2022, tens of thousands of gaming industry employees have been laid off by companies big and small, with Microsoft, Embracer Group, EA, and PlayStation among the largest to announce cuts. Many decisions have been attributed to the worsening economic climate following the pandemic, during which many media companies experienced significant growth as people stayed home and consumed more digital products than usual.

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