Microsoft has just commenced the trimming of its employee head count, and one of the biggest casualties so far is its Xbox Entertainment Studios, which will be closed this year as part of the company's restructuring strategy.
The entertainment unit did not have a lot of time to carve a place for itself within the company. It was formed just last May with the mission of creating original television content for the Xbox One console. The studio has 200 employees in California and Vancouver. Microsoft has yet to announce how many employees in the unit will be laid off. However, the jobs of the high-ranking executives in charge of the studio remain secure. In an email to employees, Phil Spencer, who heads the company's Xbox division said that Xbox Entertainment Studios President Nancy Tellem and Executive Vice President Jordan Levin will stay with the company.
"As the planned reduction to our overall workforce announced today and in light of our organization's mission, we plan to streamline handful of portfolio and engineering development efforts across Xbox... One such plan is that, in the coming months, we expect to close Xbox Entertainment Studio," Spencer said in a statement.
The Xbox studio venture showed promise when it was first announced. Last April, Microsoft announced that Steven Spielberg would be working as an executive producer on a TV series based on Halo. Ridley Scott was also said to have been working on a "digital feature" based on the video game.
The studio's first show is Every Street United, an eight-episode reality series that profiles undiscovered soccer players from around the world. For the show's finale, the contestants will compete in a four-on-four street soccer match in Brazil during the World Cup.
According to a report from Recode, the studio failed to build on its promise. Sources said that the team struggled to close deals for premium content because it was disorganized and did not have an effective business model.
While the Xbox Entertainment Studio closing was sudden, it's not that surprising. Microsoft CEO Satya Nadella talked about redefining the company's core in a recent memo to employees, and while the Xbox division mostly emerged unscathed in the company's round of 18,000 job cuts, it makes sense that a new non-core would be first on the chopping block.
