Microsoft’s AI Automation in Candy Crush Leads to 200 Layoffs at King

Microsoft sent shockwaves through the gaming industry in July 2025 as it was revealed that 200 employees at King—the acclaimed developer of Candy Crush Saga—were laid off and, in many cases, directly replaced by the very AI tools they built. For years, the tech giant invested heavily in artificial intelligence to streamline game development and reduce costs. Yet the sudden transition to AI-driven automation, accompanied by the abrupt dismissal of around 200 staff at King, has triggered heated discussions about ethics, productivity, and the future of creativity in game design.

The Layoffs That Shook King

At the start of July, internal memos and industry reports confirmed that King would let go of roughly 10% of its global workforce as part of an ongoing restructuring-driven by new AI capabilities. The layoffs primarily affected:

• Level designers

• Narrative copywriters

• UX specialists

• User researchers

What made this scenario particularly controversial was the role these employees played in developing the AI tools now being used to replace them. Multiple sources confirm that teams of designers and writers had spent months, even years, creating AI systems to automate tasks like level generation, narrative scripting, and playtesting—tasks now being handled with minimal human intervention.

One King employee remarked, “Most of the level design team has been wiped, which is crazy since they’ve spent months building tools to craft levels quicker. Now those AI tools are basically replacing the teams.”

Microsoft’s Broader AI Strategy

Microsoft’s move at King is emblematic of a much wider shift across its divisions. The company recently laid off nearly 4% of its total workforce—around 9,100 jobs—citing the need to streamline management, reduce costs, and accelerate its ambitions as an “AI-first” business. The Candy Crush layoffs are only a fraction of these reductions, but perhaps the most symbolic.

Microsoft has committed approximately $80 billion for capital expenditure in 2025, the majority earmarked for AI and cloud computing infrastructure. In an internal communications push, Xbox boss Phil Spencer echoed a new emphasis: “We have more players, games, and gaming hours than ever before, and our roadmap has never looked stronger.” Yet this optimism has done little to quell anxiety and anger among those affected by automation-driven layoffs.

Human Toll and Industry Outcry

Inside King, morale has reached “an all-time low.” Staff describe the process as chaotic and demoralizing, with complaints about poor communication and a lack of transparency from management and HR. One source describes the mood bluntly: “Morale is in the gutter.”

The Candy Crush layoffs hit hardest at Farm Heroes Saga and other Candy Crush projects, with many teams losing the majority of their design or narrative staff. Some former employees voiced bitterness at being instrumental in building their own replacements.

Unions, industry analysts, and even some remaining Microsoft employees argue the move undermines creative talent and innovation in favor of efficiency and short-term profit. Concerns have also been raised over how the AI systems will sustain quality in level and content design, and whether they can truly replicate the nuance of human creativity.

The Role of AI: Cost-Cutting or Innovation?

From Microsoft’s perspective, the transition is both a business necessity and a strategic leap forward. As gaming experiences grow and resources tighten, AI offers the promise of:

• Faster level generation

• Automated playtesting and bug fixing

• Streamlined narrative scripting

• Lower operational costs

King’s Chief Technology Officer, Steve Collins, has been open about the company’s ambition to pivot to an “AI-first” model for years. In 2023, he described AI as “a tool that augments what our designers and testers can do,” with a goal of scaling up the creation of thousands of new game levels at unprecedented speed. Now, though, this vision has arrived faster and more disruptively than many anticipated.

Fallout

Microsoft’s handling of the layoffs has been widely criticized, with reports describing HR’s approach as “an absolute mess.” The lack of transparency and suddenness of the replacements has left a lasting mark on employee trust and public image.

Meanwhile, affected game developers and other industry workers are going public with their experiences—on forums, social media, and in interviews—warning that the “efficiency imperative” may come at the expense of creativity and job satisfaction.

Automation’s Uncertain Game Plan

As AI rapidly becomes more capable, Microsoft’s King division stands at a crossroads that many in gaming are likely to follow. The company’s willingness to sacrifice hundreds of skilled, creative jobs for automated systems illustrates the high stakes and fast pace of change facing not just developers but the future of entertainment itself.

The central question lingers: Will AI-powered Candy Crush remain as fun and addictive as before, or will players ultimately notice the difference when the human touch is gone? The coming months—and player feedback—will provide the industry with valuable lessons. For now, King’s 200 laid-off designers and developers are left to watch as their own creations take over, possibly setting a new precedent for automation across the gaming world.