Xbox Ending Contracts With Third-Party Vendors Ahead Of Studio Layoffs
Xbox is preparing for what’s expected to be the largest single group of job cuts in its 25-year history. With Microsoft’s fiscal year ending on June 30, plans are already underway to reduce costs, with layoffs expected to commence in the coming weeks.
As part of this cost-cutting strategy, Xbox is ending contracts with third-party vendors. According to Bloomberg’s Jason Schreier, the company has begun cutting various vendor relationships, with immediate impacts already visible. Assembly, Xbox’s main PR agency, is laying off employees today as a result of these cuts.
The exact scope of Assembly’s layoffs and whether Xbox is completely terminating its relationship with the agency or simply scaling back services remains unclear. Assembly has been a long-standing partner of Xbox’s public relations efforts.
The layoffs won’t begin until after the fiscal year officially closes, but the vendor cuts are already in motion. This suggests Microsoft is laying groundwork and managing third-party relationships ahead of the broader organizational restructuring. The ripple effects are already being felt by companies outside of Microsoft’s direct ownership, highlighting how major corporate decisions can impact the broader ecosystem and supply chain.