The gaming industry has been experiencing a slew of unprecedented layoffs recently. The most recent comes after Microsoft fired over 2,500 employees, leaving many out of work as the holidays are approaching. An employee union at the tech company is on strike after the company chose to outsource work without properly bringing that decision forward to the union. Here’s everything we know so far.

Microsoft Layoffs

In September, it was reported that Microsoft planned to lay off 3% of its gaming workforce. This was estimated to be around 650 employees due to the acquisition of Activision Blizzard. However, they ended up making a much more massive layoff and fired 2,500 employees instead. This was a devastating loss to many and angered consumers, especially after discovering that the CEO was granted a $30M raise directly after the mass firings.

The company was heavily criticized for the number of layoffs it ended up doing, citing the irreparable damage to the former employees. It was said that the majority of the employees laid off were only going to be in corporate roles. However, this was announced when the company claimed only 650 employees would be fired.

Despite the controversy, the company is still looking to acquire more. Microsoft Gaming CEO Phil Spencer made a statement to Bloomberg about the future of Xbox. “We definitely want to be in the market,” he said. He hinted that they had their eyes on tech companies that would add to their plans at Microsoft gaming. They also hinted at new hardware, including a potential handheld.

Microsoft Union Strikes

Despite the CEO’s positivity amid so much controversy and firings, things with Microsoft employees aren’t going well. ZeniMax Workers United-CWA was formed last year as the largest gaming union. Last year, The Communication Workers Of America, also known as the CWA, assisted ZeniMax in forming. ZeniMax is the parent company of game studios; one of the most notable is Bethesda, which created The Elder Scrolls. The parent companies of ZeniMax are Microsoft Gaming/Xbox Game Studios, meaning that, by extension, Bethesda is also owned by Microsoft.

The strike is coming after Microsoft allegedly promised its employees that it would incorporate more contract workers into the union and give those workers the opportunity to become full-time employees. The promise was made in 2023. Now, towards the end of 2024, not only has that not happened, but they have also begun outsourcing work that could otherwise be delegated to union workers.

It isn’t only an issue that Microsoft has been outsourcing the work, but they have also been doing it without notifying the union. This violated the agreement with the ZeniMax union. While the strike reportedly only lasted one day, it set a precedent for Microsoft to see the power of the union within their company. Given that the ZeniMax union is relatively new, it’s imperative for them to establish themselves as an organization that takes the fair treatment of their workers seriously.

Final Thoughts

The gaming industry has taken multiple hits recently, and Microsoft is no exception. The major layoffs to acquire Activision Blizzard have made people not trust the conglomerate anymore, and their continued actions don’t help build trust. In this day and age, it isn’t only a matter of Microsoft pleasing its employees but also its consumers. 

Advocacy for the fair treatment of workers is at an all-time high, something we saw much of during the SAG and WGA strikes. People would happily suffer through video game release delays and consoles being pushed back if it meant that the employees who make such things happen are well taken care of. This is a concept that Microsoft needs to quickly learn.