Candy Crush maker King fires 200 workers to replace them with AI they built

Two major gaming companies recently demonstrated how not to handle AI-driven workforce changes, with King (maker of Candy Crush) laying off 200 employees to replace them with AI tools those same workers had built, and Microsoft’s Xbox division posting AI-generated artwork for new job openings just after conducting layoffs. These incidents highlight a growing concern about how companies communicate and implement AI-driven changes while maintaining employee trust and morale.

What happened at King: The mobile gaming giant announced layoffs affecting approximately 200 staff members, primarily targeting middle management and UX and narrative copywriting roles.

• Multiple sources inside King alleged that some employees are being “targeted” by HR for expressing dissatisfaction about the layoffs.
• The laid-off workers are being replaced by AI tools they themselves had built and trained, creating what one employee called “the ultimate AI worker nightmare.”
• One staffer told MobileGamer.biz: “the copywriting team is completely removing people since we now have AI tools that those individuals have been creating.”

The financial context: King’s revenue has remained stable at around $1.45 billion annually since 2021, suggesting the layoffs aren’t driven by financial distress.

• The flat revenue pattern may explain management’s decision to replace workers with cheaper AI to grow profits without revenue growth.
• An employee criticized the move, saying “it’s absolutely disgusting but it’s all about efficiency and profits even though the company is doing great overall.”

Microsoft’s misstep: Xbox’s principal development lead Mike Matsel posted new job openings shortly after the company announced thousands of layoffs across its gaming division.

• The job posting, seeking workers with expertise in “device drivers, GPU performance, or related validation or engineering system experience,” included an AI-generated illustration of a female worker.
• This triggered backlash on social media, with one user commenting: “First layoffs, then post for hire with AI slop, wonderful work, Xbox.”
• The timing was particularly tone-deaf given Xbox CEO Phil Spencer’s earlier email claiming the platform had “more players, games, and gaming hours than ever before.”

Why this matters: These incidents illustrate how companies can damage employee trust and morale when implementing AI-driven changes without transparency or sensitivity.

• The link between leadership honesty and business success is well-established, yet both companies appeared to obscure their AI-driven motivations.
• Using AI-generated content in job postings was seen as particularly insulting to human experts in computer graphics and related fields.
• The cases demonstrate the importance of considering how AI implementation affects both former and current employees’ perception of the company.