Blog Post

Xbox franchise gets caught up in Microsoft layoffs after all

Last week, Microsoft (S MSFT) CEO Satya Nadella told Microsoft troops how important Xbox is to the company’s overall strategy. This week the company said it plans to close Xbox Entertainment Studios as part of wide-ranging layoffs.

A Microsoft spokesman confirmed the news, first reported by Recode,  via email, writing:

“As Satya said last week, Xbox is important to Microsoft.  Games are the single biggest digital life category in a mobile-first world.  And Xbox is a strong consumer brand with an incredible fan base.  As part of the planned reduction to our overall workforce announced today and in light of the Xbox vision to focus more on games and gamers, we plan to streamline a handful of portfolio and engineering development efforts across Xbox. One such plan is that we will expect to close Xbox Entertainment Studios in the coming months.”

The statement added that some projects will continue with Entertainment & Digital Media president Nancy Tellem, EVP Jordan Levin and a subset of the XES team staying on. Those projects include the Signal to Noise documentary series and Halo: Nightfall as well as the Halo TV series. Collaborative projects with partners will also continue.

The studio was founded two years ago when Microsoft hired Tellem from CBS to create non-game content for Xbox. The plan was that Xbox and then Xbox One would anchor Microsoft’s presence in the living room, becoming a hub for not only gaming, but TV, interactive video formats and other content. In February, 2013 the company announced plans to launch original interactive programming. Just three months ago, Microsoft announced a number of additional titles, and Tellem said at the time that Microsoft’s Xbox Studios efforts were “not a race but a marathon.”