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Phil Spencer Says Massive Layoffs Happen Due to a Lack of Industry Growth

"I'll say the thing that has me most concerned for the industry is the lack of growth."

Image credit: Phil Spencer/Microsoft

The recent significant layoffs in the gaming industry have been particularly challenging. Many people are being downsized, with lots of studios having to close their doors for good.

Speaking of recent massive layoffs, we can turn to Microsoft, which in January, cut off nearly 2,000 employees, most of them from Activision Blizzard. Touching upon the job cuts, Phil Spencer recently shared his thoughts on the problem, and according to him, it all comes down to the industry having no growth.

"I'll say the thing that has me most concerned for the industry is the lack of growth," Spencer shared. "And when you have an industry that is projected to be smaller next year in terms of players and dollars, and you get a lot of publicly traded companies that are in the industry that have to show their investors growth – because why else does somebody own a share of someone's stock if it's not going to grow? – the side of the business that then gets scrutinized is the cost side. Because if you're not going to grow the revenue side, then the cost side becomes challenged."

Adding to that, Spencer noted that Xbox is fundamentally a business, which means that it must be profitable to meet the expectations of shareholders and executives, and that the company can't show poor performance.

"We're a business," Spencer added. "I've said over and over. I don't get any luxury of not having to run a profitable growing business inside of Microsoft. And we are that today. But just across the industry – you mentioned it, and in sitting here at GDC, I reflect on friends of mine in the industry that have been displaced and lost their jobs and how just, I don't want this industry to be a place where people can't, with confidence, build a career."

Earlier today, we reported that it might be possible to access the Epic Games Store on Xbox consoles in the future, as Phil Spencer looks to change the traditional console model.

For more of Spencer's thoughts, you can read Polygon's interview. Also, join our 80 Level Talent platform and our Telegram channel and follow us on InstagramTwitter, and LinkedIn, where we share breakdowns, the latest news, awesome artworks, and more.

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