Amazon Web Services (AWS) Has Layoffs and Microsoft Gaming/Entertainment Division Has an Uncertain Future

posted by Roy Schestowitz on Jul 22, 2025,
updated Jul 22, 2025

This has absolutely nothing to do with "hey hi" (AI), which is itself failing

Two things that we noticed in passing yesterday, other than many reports about Windows TCO [1,2] and Microsoft as a national security risk [3], were: 1) after Microsoft announced mass layoffs on a national holiday (or shortly before US Independence Day) the gaming division is basically in a state of disarray [4-7] and that's not limited to games; it impacts entertainment. Little by little Microsoft is exiting this market.

It's no secret that Azure was mostly failing and then Microsoft started talking a lot about "hey hi" instead of "the cloud". The issue seems not so limited to Microsoft as GAFAM in general made too optimistic predictions [8,9] and is now cutting back. It's only a matter of time until we see more of the "hey hi" layoffs at GAFAM as well. Microsoft is already firing "hey hi" staff. It also shuts down "hey hi" datacentres.

When they assured shareholders this stuff was the future they were clearly not honest.

Slop is now facing more bans [10] (hard not to agree), morale issues [11], and utter failures [12]. This isn't quite what people were promised.

At any rate, it's good to see all those horrible things crashing and burning. █

Related/contextual items from the news:

1. Hackers Exploit Microsoft SharePoint as Firm Works to Patch [Ed: How Not to Report News About Microsoft]

   Vulnerabilities in the software have allowed hackers to access file systems and execute code, the US Cybersecurity and Infrastructure Security Agency warned on Sunday. While Microsoft said over the weekend that it had released a new patch for customers to apply to their SharePoint servers “to mitigate active attacks targeting on-premises servers,” the company was still working to roll out others to address ongoing security flaws.

2. Microsoft’s SharePoint servers comes under widespread cyberattack — urgent fix released

   Tech giant Microsoft has released an emergency security update following reports of "active attacks" targeting its SharePoint server software used by government bodies and businesses for internal document sharing.

   The company confirmed that the vulnerabilities affect only on-premises SharePoint servers. Microsoft 365's cloud-based SharePoint Online remains unaffected.

   The attacks reportedly exploit a remote code execution vulnerability linked to the deserialisation of untrusted data.

3. Microsoft will no longer involve Chinese engineers in working with Pentagon cloud systems

   As TechCrunch reports, Microsoft has changed its policy on servicing government customers after ProPublica discovered that some of the technical tasks supporting the Pentagon’s cloud infrastructure were performed by engineers working from China. Formally, their activities were supervised by «digital supervisors» — American specialists with access to classified information. But, according to journalists, they often did not have the proper technical training to effectively monitor the access and actions of foreign engineers.

4. Rumor: MS Tells Their Developers They’re Taking “Strategic Bets” On What Games To Make

   Xbox and Microsoft fans have been frustrated and perplexed about what’s been going on in the company. Microsoft has held a large number of layoffs across the company, and this included not only layoffs of developers in the gaming division, but also cancellations of big projects like Zenimax Online Studios’ Blackbird and Perfect Dark.

   At the same time, Microsoft confirmed with even the laid off developers that the company, and the game division, are highly profitable and achieving lifetime records of profits and playtimes. Microsoft has yet to talk to the public about these changes, but many developers seem to also be confused with what they’re doing. In the latest episode of the Xbox Two podcast, Corden shared a lot of insight on this situation.

5. Microsoft abruptly stops selling and renting movies and TV shows on Xbox and Windows devices

   As of July 18, Microsoft has stopped selling and renting TV shows and movies on both Xbox and Windows devices.

   An update to both the Xbox and Windows websites confirms "Microsoft has stopped selling new movie and TV content." Microsoft did not provide a reason for the withdrawal of service, but did assure customers that existing paid content will remain available for the foreseeable future.

6. Xbox's Recent History Of Missing And/Or Canceled Games

   An unfortunately frequent occurrence in games is the announcement of a cool and exciting new project from a team followed by months, even years, of radio silence. Typically, these titles are announced far ahead of time--at times without gameplay and often with little more than a logo--to drum up excitement (as well as recruitment numbers) before beginning a prolonged development in earnest. Sometimes, it just takes a long time to cook up the hottest new thing (like Hollow Knight: Silksong) and other times, these tantalizing new worlds just don't make it to the finish line.

   Microsoft, which has experienced a series of canceled games and studio closures amidst constant layoffs, has accrued a portfolio filled with cancellations and games that have simply disappeared over the years. Since the beginning of the Xbox One era in particular, many of its most exciting prospects--games like Scalebound and Everwild--have faced lengthy delays before being canned, while others, like the now-canceled MMO from ZeniMax, never even see the light of day. Between the silence and the cancellations, it's hard to know exactly what's coming from Xbox, so it felt worth collecting everything we know into one place and taking stock of what's been put on the curb and what might still be on the back burner.

7. Microsoft kills Xbox entertainment sales

   Microsoft stunned its gaming community this week by abruptly terminating movie and television purchases across Xbox consoles and Windows Store platforms, effective July 18. The unexpected decision represents a seismic shift in the company’s digital entertainment strategy, forcing countless users to seek alternative streaming solutions.

   The Redmond-based technology conglomerate offered no detailed explanation for the dramatic policy change, instead quietly directing customers toward competing services. Industry analysts suggest the move signals Microsoft’s retreat from direct content distribution, potentially reshaping how console owners consume digital media.

8. Amazon cuts jobs in AWS unit as AI reshapes business strategy

   Amazon has laid off hundreds of employees within its Amazon Web Services (AWS) cloud computing division, according to two sources familiar with the matter, as the company continues to restructure in response to the growing use of artificial intelligence across its business.

   The job cuts follow a warning last month from CEO Andy Jassy, who said that generative AI tools would lead to workforce reductions as businesses automate more tasks and rethink staffing needs.

9. Amazon Web Services Cuts Jobs Amid AI Expansion and Automation Shift

   Amazon Web Services (AWS), the cloud computing division of Amazon, has begun laying off employees as part of a broader organizational shift toward automation and artificial intelligence (AI). The company has not disclosed the number of affected employees or the exact teams involved, but sources close to the matter indicate that roughly 100 roles may be on the line.

10. ‘No AI For Judgments’: Kerala HC Bans Use Of ChatGPT-Like Artificial Intelligence Tools With New Policy

    In a historic first in the Indian judiciary, the Kerala High Court has come up with a policy to curb the rampant (mis)use of AI in legal reasoning and decision-making.

    In the 'Policy Regarding Use of Artificial Intelligence Tools in District Judiciary,' the Kerala HC advises extreme caution in the indiscriminate use of ChatGPT-like AI tools. Per the HC, some of the negative consequences of AI include “violation of privacy rights, data security risks, and erosion of trust in the judicial decision-making.”

    The policy document issued on Jul 19, states the objective of the move is to ensure that “AI tools are used only in a responsible manner, solely as an assistive tool, and strictly for specifically allowed purposes.“ It further adds, “The policy aims to ensure that under no circumstances AI tools are used as a substitute for decision-making or legal reasoning.”

11. Tech layoffs: Dell employees report burnout and morale decline amid AI push

    Dell is struggling with increasing internal challenges as employees report widespread burnout and a significant decline in morale. The reason behind this lower morale and burnout is attributed to the extensive layoffs as well as the company’s accelerated induction of Artificial Intelligence in more of its operations.

    The company’s “Tell Dell” survey showed a dramatic plummet in its Employee Net Promoter Score (eNPS) to a mere 32. This is a steep drop from a higher score of 63 recorded in 2023, thus signaling a rapid deterioration of employee satisfaction and advocacy within just a year.

12. Vibe coding dream turns to nightmare as Replit deletes developer's database | TechSpot

    Jason Lemkin, founder of the SaaS-focused community SaaStr, initially had a positive experience with Replit but quickly changed his mind when the service started acting [...]