Microsoft overhauls Xbox as four studios spun off and management slashed

Microsoft is shaking up its Xbox division, which the company has admitted is currently not healthy, in a restructuring that includes cutting management layers and moving four of its studios out of the fold. Compulsion Games, Double Fine, Ninja Theory and Undead Labs are being transitioned to independent status or new ownership. The overhaul comes as Microsoft laid off many of the workers behind the acclaimed remake of the Doom series, and as the company tries to combat what it calls a hardware crisis by dropping its management structure from as many as 14 layers down to just five and centralizing operations under a new chief operating officer, industry veteran Helen Chang. Microsoft says no major first-party projects have been canceled. The changes land in a brutal job market for game developers, with one industry advocate noting the overall odds of finding a job in games over 12 months sit at around 15 percent.

Microsoft is putting its Xbox business through a sweeping overhaul, one the company has framed against a blunt admission that the division is currently not healthy. The restructuring reaches from the top of the organization down to the studios that make its games, and it has landed as a jolt across an industry already on edge about its future.

At the center of the shakeup is a decision to move four Microsoft owned studios out of the company's direct control. Compulsion Games, Double Fine, Ninja Theory and Undead Labs are being transitioned to independent status or new ownership, a significant loosening of a portfolio Microsoft had spent years assembling.

The changes have come with real human cost. Microsoft laid off many of the workers behind the popular and critically acclaimed remake of the Doom series, a reminder that even success on the creative side has not shielded staff from the cuts sweeping through the business.

Much of the reorganization is aimed at flattening the company's structure. Xbox is slashing its management layers, dropping from as many as 14 levels down to just five, and centralizing its operations under a new chief operating officer, the industry veteran Helen Chang, in a bid to run a leaner and more streamlined division.

Microsoft has cast the moves as a response to pressure on its business, describing an effort to combat what it calls a hardware crisis. At the same time, the company has sought to reassure players and developers that the creative pipeline remains intact, stating that no major first-party projects have been canceled as part of the changes.

The turmoil at Xbox mirrors a wider squeeze across the video game industry. A gaming community advocate who helps people find work in the sector, Amir Satvat, said that when he published data on the odds of landing a job in games over a 12 month period, the figure startled many, sitting at around 15 percent for everyone.

Part of the pressure, he suggested, comes from a shifting global labor market, with developers now available in some regions for a fraction of the cost they command in traditional Western markets. For those left behind by the layoffs, the reality of the industry's job market remains a daunting prospect, even as companies like Microsoft insist the reshaping is meant to secure the road ahead.

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