Just hours after the significant layoffs reported in Xbox Game Studios, new details about the situation are emerging. According to various reports, these cuts were driven by Microsoft‘s need for massive investments totaling $80 billion in artificial intelligence (AI).
While the issue hasn’t been officially confirmed, it has been reported by multiple sources, including The Seattle Times (thanks Windows Central), which gathered internal testimonies to support the claim. The recent layoffs, which affected around 9,000 employees, many of whom were from the gaming division, seem to be linked to the shifting of resources toward AI development.
The Shift Toward Artificial Intelligence
The connection between AI and the layoffs at Microsoft has been explored from several angles. However, it appears that the cuts are less about replacing human workers with AI and more about redirecting resources into large-scale AI investments. These investments have led to significant cuts within the Xbox division.
According to the reports, the massive layoffs are a result of the pressure from Microsoft’s top management and investors to stay competitive in the fierce race for AI advancements. In light of recent tensions in Microsoft’s collaboration with OpenAI, the company has opted to make drastic reductions in other departments to secure funds for its AI initiatives.
The plan to invest approximately $80 billion in AI infrastructure was deemed essential, which led to the downsizing of other internal branches, including the gaming division. This shift has already resulted in the cancellation of several projects, such as Perfect Dark and Everwild, as well as the closure of the studio The Initiative. Other teams, like Turn 10, also faced staff reductions, putting the future of popular franchises like Forza Motorsport at risk.
