2024 may not be kind for game developers.

Johnny Awesome said:
There are companies that regularly lay off the worst 10% of their employees annually as statistically even an average new hire will be better than your worst 10%.
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For just a moment, let's hand-wave the whole "the shadow of the axe will goad remaining poverty-caste employees into doing the work of those we laid off, increasing profits to our senior executives and shareholders" part of how layoffs are typically handled in big companies. In this theoretical bubble where greed isn't driving the decision, I do understand how a company can find itself in a place where some downsizing is necessary. Further, I can also understand how there will always be some portion of the employee pool who performs at a lesser level than others.

As such, I can fathom a situation where the company decides "the lowest performing 10% will be laid off" as a one-time action. However, a regular year-over-year activity of removing the "bottom 10%" stops being useful at about the second year, transitioning to a nasty culture of simply avoiding the bottom rather than reaching for the top. Even further beyond, all of your tenured staff who know and understand how the corporation works go missing, or find themselves dis-incentivized to stay. IBM did this same exact "bottom 10% gets laid off" thing for almost a decade, and it became an MBA lesson in how to royally screw your company's mindshare and productivity.

First year? Sure. Second year? Maaaaybe. 3rd year of such bullshit and the company has thoroughly demonstrated they're only after the shortest-term gains and long term stability is not anywhere in the cards. For a brand new CIO or CFO or maybe even CEO, it's quick way to artificially deflate SG&A for a while. The problem later becomes the toxicity of the culture becomes well known, and nobody will want to work for you, including the people who work for you, unless you start paying a LOT of money. And then, tada, here comes the super inflated SG&A again.
 
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Hopefully this is the last year of all of this. Tech had a massive expansion during COVID, and now we're seeing a massive contraction now.
The games industry may just be behind the rest of tech in doing it's contraction here.

Some notes on other companies on mass hiring was being done on COVID:

List of Companies Hiring During the COVID-19 Pandemic | California State University Stanislaus

Companies Hiring During the Pandemic Instacart – hiring 300,000 contract workers over the next three months. Walmart – hiring 150,000 workers for its distribution and fulfillment centers. Amazon – hiring 100,000 new workers for its fulfi
www.csustan.edu www.csustan.edu

Unfortunately the teams that are letting go (developers) are likely the ones where their title no longer has a sustainable business case to continue further. It's unfortunate that they couldn't be reprioritized to other projects however.
I was expecting to see the RedFall team to be impacted, as well as some of the Starfield team, and some of the MMO based teams, but perhaps they are doing better than I realized. Overwatch 2 team unfortunately did go. I assume Starcraft teams were already re-prioritized.

Worthwhile revisiting this piece that flew under the radar until it happened:
www.theverge.com

New survey shows game developers are very worried about layoffs and AI

Survey says AI and layoffs are developers’ biggest concerns.
www.theverge.com www.theverge.com

Over one-third of respondents reported that they were impacted by layoffs either personally or at their company. However, this survey was conducted in September 2023 — right around the time Epic Games announced it was laying off over 800 employees and before layoffs at Unity, Embracer Group studios, and Bungie. Fifty-six percent of respondents feel that layoffs are coming to their own studios and, according to those surveyed, the preponderance of layoffs is the result of “post-pandemic course correction.”
“Studios grew too quickly during the pandemic and people are spending less money on games during a cost-of-living crisis,” read an anonymous response.
Dom Tait, research director at Omdia, GDC’s research partner for the survey, wrote that the current wave of layoffs is coming from employers adjusting spending levels to return to their pre-pandemic levels.
“However,” Tait wrote in the survey, “with the forecast returning to steady growth to 2027, this ought to present a more stable picture for employment levels in future.”
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Albuquerque said:
For just a moment, let's hand-wave the whole "the shadow of the axe will goad remaining poverty-caste employees into doing the work of those we laid off, increasing profits to our senior executives and shareholders" part of how layoffs are typically handled in big companies. In this theoretical bubble where greed isn't driving the decision, I do understand how a company can find itself in a place where some downsizing is necessary. Further, I can also understand how there will always be some portion of the employee pool who performs at a lesser level than others.

As such, I can fathom a situation where the company decides "the lowest performing 10% will be laid off" as a one-time action. However, a regular year-over-year activity of removing the "bottom 10%" stops being useful at about the second year, transitioning to a nasty culture of simply avoiding the bottom rather than reaching for the top. Even further beyond, all of your tenured staff who know and understand how the corporation works go missing, or find themselves dis-incentivized to stay. IBM did this same exact "bottom 10% gets laid off" thing for almost a decade, and it became an MBA lesson in how to royally screw your company's mindshare and productivity.

First year? Sure. Second year? Maaaaybe. 3rd year of such bullshit and the company has thoroughly demonstrated they're only after the shortest-term gains and long term stability is not anywhere in the cards. For a brand new CIO or CFO or maybe even CEO, it's quick way to artificially deflate SG&A for a while. The problem later becomes the toxicity of the culture becomes well known, and nobody will want to work for you, including the people who work for you, unless you start paying a LOT of money. And then, tada, here comes the super inflated SG&A again.
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Well, it can be policy without being known...

When you lay off 100 and hire 120, people don't generally complain.

There are limits, of course.
 
By the way, my reply wasn't aimed at you. It's just me voicing my absolute disgust with terroble leadership doing stupid things in the name of money.

And whether it's voiced or not, a policy that removes ten percent of the workforce every year becomes known very quickly.
 
I know a very large company that has been doing it for a decade, unnoticed. The trick is to keep hiring better people. People don't complain when that's going on and bonuses are generous.

I also want to note that I'm not unsympathetic to people losing their jobs in general. I'm just saying (not directed at anyone in particular) that it's the mentality of a child to think that layoffs=evil.

Underperforming and redundant entities need to be culled for success to happen. The details matter. We don't know them, so we can't say whether or not MS was smart or not.
 
iroboto said:
Im pretty sure this was expected, but just to be clear the redundancies were not likely developers.

You’ve got marketers, accounting, finance, strategy, mid level management, security, IT, networking, social media people, community managers, HR, etc that would be replaced as they would adhere to MS standards.

Entire teams typically dedicated towards managing Amazon servers, well if they move them to azure, those teams will be gone. Etc

While i don’t doubt some developers may have lost their role, 2000 developers is unlikely. That’s about 5 Ubisoft studios worth of developers assuming 400 per studio.
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Yes, my bad. Was thinking about that. Probably most of it was not involved in game development.

But 1900 is a big number anyway, so some of the names are possibly developers. For example, the chief design officer of Blizzard is leaving, and he was involved in game creation. Also, Blizzard survival game was cancelled. That was a weird day.

But also, we don’t know the reasons behind it. As I said, let’s see what happens, we have to wait some years to have a clear view on all of this.
Johnny Awesome said:
I know a very large company that has been doing it for a decade, unnoticed. The trick is to keep hiring better people. People don't complain when that's going on and bonuses are generous.

I also want to note that I'm not unsympathetic to people losing their jobs in general. I'm just saying (not directed at anyone in particular) that it's the mentality of a child to think that layoffs=evil.

Underperforming and redundant entities need to be culled for success to happen. The details matter. We don't know them, so we can't say whether or not MS was smart or not.
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Maybe not all of them were redundant or underperforming. Maybe Microsoft just wanted to have more revenue by having less staff on Microsoft Gaming or reallocate resources on AI, for example.

Perhaps the employees being laid off were not being viewed as essential, but possibly they were still making a difference on the final product.

In the same way we don’t know MS we also don’t know their former employees. So the mentality “laid off = underperforming” is simplistic as well.
 
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B m A said:
In the same way we don’t know MS we also don’t know their former employees. So the mentality “laid off = underperforming” is simplistic as well.
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Which Jonny Awesome underlined, saying, "The details matter. We don't know them, so we can't say whether or not MS was smart or not." All suppositions are pure speculation. All we can do is look at the industry at large for trends.
 
Shifty Geezer said:
Which Jonny Awesome underlined, saying, "The details matter. We don't know them, so we can't say whether or not MS was smart or not." All suppositions are pure speculation. All we can do is look at the industry at large for trends.
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Yeah, I initially thought “them” was referring to Microsoft. Misinterpreted it.

Agree on that part.
 
That depends on how you define "redundant". Were those people earning the company money? If not, they were redundant.

Once again - the devil is in the details. For all we know MS has decided they want to make less CoD games than ABK used to. In that case Sledgehammer should be smaller. It would only make sense.

A good example is this survival game that yesterday was everyone's darling project that cruel MS axed and now turned out to be a $100 million dollar piece of shit mobile game that MS wisely decided to cut. Details. Details.
 
Even if they change the pace of Call of Duty releases, not downsizing the studios involved would be good for the franchise. Keeping more staff would facilitate using that extra time to make each release feel special.
 
"feel special" isn't business talk. "make money" is business talk. These are business decisions.

My point isn't to prove to you that downsizing Sledgehammer was a great decision, but to illustrate how it "could" be a good decision depending on ... you guessed it ... the details.
 
Johnny Awesome said:
"feel special" isn't business talk. "make money" is business talk. These are business decisions.
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So that makes it ok? The most valuable company on the planet who just spent $60,000,000,000 of cash they had lying around to buy up this company really just needed to cut thousands of people in order to stay viable, eh?

Every single greedy, crappy decision a company could ever make could always be shrugged away as 'business decisions'. Like, you could literally defend anything any company ever does with this, no matter how obviously lousy.

None of any of this is good for consumers. And it's clearly not good for employees at these places. And so, like the human beings we hopefully are, we consider this something of a dark day.
 
Seanspeed said:
None of any of this is good for consumers
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I get the rhetoric. But to say none of it is good for consumers is a bit of a false flag. We’ve had hundreds of technological innovations that have wiped out millions upon millions of jobs which allowed prices to stay low and made a great deal of things with high availability.

I get it’s easy to be upset that the richest company in the world is cutting jobs, but MS is making it clear to Xbox that they have to stand on their own feet here, they won’t have the funds from 1 area constantly keeping another alive. I’m also fairly positive that if the merger failed to go through Kotick and team would have done the same thing though they would have less redundancies to cut for obvious reasons.

Xbox has to figure out how to make gaming push both forward in innovation on both the market and quality aspects while keeping the cost of gaming lower for their audience as long as possible.

This goes for all the platform holders. There are underlying reasons games industry have been able to keep prices of games so low when all other industries have gone up in pricing dramatically.

But if you really want to stop companies from laying people off; they need to fix their labour laws in the area where the studio resides.

There’s a reason why the majority of layoffs tend to be in Texas, and other parts of the US. And there’s a reason why you almost never see layoffs in AUS, you also don’t see many video game firms there either.

We don’t see a lot of layoffs of video game studios in Canada either, it happens from time to time but employees are better protected than in US.

Labor laws is what needs to change. And you cannot change labour laws in a place you don’t reside in.
 
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Companies should be able to layoff whoever they want. Some things have to die sometimes so that new things can be born.

MS management's job is to make as much money as possible for the shareholders, within the bounds of the law.

Economic growth comes from increasing productivity. That means doing more with less. That's why we aren't out there spending 90% of our day foraging to feed ourselves.
 
iroboto said:
We don’t see a lot of layoffs of video game studios in Canada either, it happens from time to time but employees are better protected than in US.
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Is that the reason (I'm actually not sure how Canadian developers are more protected?) or is it because Canadian labor is much cheaper? I think US game developers likely out earn Canadian ones just nominally without even factoring the currency difference.

Couple that with favorable currency and aggressive subsidies in some areas (Quebec) and well it's kind of clear where you get more cost cutting from.
 
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