Microsoft makes Massive cuts
[UPDATE] Following Venture Beat report, Microsoft confirms 28 percent of in-game ad unit pink-slipped as part of 3,000-job reduction yesterday.
Microsoft reported more than $4 billion in profit for its first fiscal quarter in January. Even with those gains, the publisher said that it would be taking precautionary measures in light of the global economic crisis, announcing that 5,000 positions would be cut by June 2010. With 1,400 of those jobs eliminated at the time of the January announcement, the other shoe dropped for many of the remaining employees yesterday, with approximately 3,000 staff reportedly let go.
Venture Beat's Dean Takahashi now reports that Microsoft's in-game advertisement firm Massive was heavily targeted by yesterday's cuts, with approximately 75 percent of the division laid off. Takahashi estimates the number of affected employees at 100, though he notes that Massive's total head count was not immediately clear. Microsoft had not responded to GameSpot's request for comment as of press time.
A pioneer for the in-game advertisement business, Massive was acquired by Microsoft in 2006 for a reported $200 million to $400 million. Though its founders left the company less than a year later, Massive went on to land in-game advertisement deals with a number of the industry's largest third-party players, including EA and Activision Blizzard.
Microsoft's games division has already taken cuts as part of the company's efforts to trim head count. In September 2008, the publisher announced plans to shutter acclaimed real-time strategy game maker Ensemble Studios. In January, another venerable PC game maker, Microsoft Flight Simulator creators Aces Studio, was also shut down. The publisher's Xbox marketing arm has also seen cuts, with the staff behind GamerscoreBlog also having been sent packing.
[UPDATE] Following the publication of this article, Microsoft responded to GameSpot's request for comment regarding Venture Beat's report. According to the publisher, while a number of positions at Massive were indeed eliminated yesterday, the total headcount reduction was at 28 percent, far less than the 75 percent originally reported.
"As part of the plan we announced in January to reduce costs and increase efficiencies, yesterday we eliminated additional positions across several areas of the company," a Microsoft representative told GameSpot. "While job eliminations are always difficult, we are taking these necessary actions in response to the global economic downturn."
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