Six-year-old Microsoft Africa Development Centre (ADC) West Africa is reportedly shutting down operations.

Microsoft’s decision to shut down the ADC launched in 2022 came as a shock to the members of staff numbering not less than 50, according to an insider source.

While Microsoft has not issued an official statement, the management allegedly informed staff of the potential shutdown.

Affected employees might receive salaries until June and continue to have access to their health insurance.

“Microsoft ADC team is made up of, majorly, engineering and communications team. It is not the entire Microsoft [Nigeria] that is affected”, an insider source told Techeconomy.

“But, this came as a shock, because the Microsoft founder was in Nigeria recently and even promised to invest in some projects. So, the teams are, kind of, confused on what could have prompted the ‘sudden’ action. There wasn’t a kind of grapevine among the staff that something like this was going to happen. Maybe in the coming days the message will become clearer.

“However, a lot of tech companies have been laying off employees since the ‘AI war’ started”, the source said.

In another sign of Africa’s growing importance as a global hub for talent, Microsoft launched a $100 million Africa Development Centre (ADC) with offices in Kenya and Nigeria.

Aiming to recruit 100 full-time engineers by the end of the year, and 500 engineers by the end of 2023, Microsoft was betting on African innovation in fields like fintech, agritech and offgrid energy and hopes to tap into them.

Through ADC, Microsoft aimed to partner with local universities that will create curriculum designed for the next wave of digital skills, including data science, AI, mixed reality, and application development.

“There is panic in Kenya office too. There have been calls from the team. They want to know what is happening, but it is difficult to process the situation. Everyone has been moody since Monday the news filtered in”.

Microsoft Axes Four Studios

Not only ADC West Africa, Techeconomy gathered that Microsoft is axing four game studios, including Arkane Austin and Tango Gameworks, reportedly so it can focus on “high-impact titles.”

In fact, Arkane Austin and Tango Gameworks confirmed the shutdowns in posts on Twitter/X.

Arkane Austin was perhaps best known for developing Redfall, a vampire-hunting online shooter that faced numerous negative reviews when it launched last year.

Tango Gameworks is behind Hi-Fi Rush, a well-received adventure title, along with the horror survival series The Evil Within and action title Ghostwire: Tokyo.

Microsoft acquired the studios after buying ZeniMax Media, the parent of Bethesda Game Studios, in 2020 for $7.5 billion.

IGN reports that Matt Booty, Xbox Game Studios head sent an email to staff, explaining that the cuts are “grounded in prioritizing high-impact titles and further investing in Bethesda’s portfolio of blockbuster games.” Booty also noted that Microsoft is shutting down Alpha Dog Studios and Roundhouse Games.

“To double down on these franchises and invest to build new ones requires us to look across the business to identify the opportunities that are best positioned for success,” he wrote. “This reprioritization of titles and resources means a few teams will be realigned to others and that some of our colleagues will be leaving us.”

The shutdown of Arkane Austin means that some of its members will migrate to other Microsoft-owned studios.

Booty also said “Redfall’s previous update will be its last as we end all development on the game. The game and its servers will remain online for players to enjoy and we will provide make-good offers to players who purchased the Hero DLC,” which was never released.

But in other cases, it looks like Microsoft is laying off video game developers. “We will provide our full support to those who are impacted in today’s notifications and through their transitions, including severance benefits informed by local laws,” Booty added.

Microsoft is making the changes as Xbox sales struggles with some estimates projecting that Sony’s PlayStation 5 has been outselling the console by a 3-to-1 margin.

In January, Microsoft also laid off another 1,900 gaming jobs citing the need to create a “sustainable cost structure” for its gaming business.

More details as it unfolds...