It looks like Blizzard’s escaped Xbox’s grim reset scythe for now, though there’s still time to be caught in the second 1600-strong layoff wave coming 2027
Microsoft’s Xbox division is undergoing a major restructuring, described as a “reset,” that is affecting its developer ecosystem. While multiple developers are reportedly relocating as part of the changes, Blizzard Entertainment—which Microsoft acquired for $68.7 billion—has narrowly escaped being caught in the immediate wave of reductions.
Blizzard was initially identified in Xbox’s announcements as a target for “reductions” and “shifting investment,” raising concerns about potential layoffs at the storied studio. However, it appears to have avoided significant workforce cuts in the current restructuring phase.
The reprieve may be temporary, though. According to reports, a second major layoff wave involving approximately 1,600 positions is scheduled to occur in 2027, which could still impact Blizzard and other Xbox-owned studios. The ongoing restructuring is part of Xbox’s broader strategic pivot, with the division reportedly targeting ambitious growth metrics. The cumulative effect of the reset is already being felt across Xbox’s “continually-shrinking staff,” indicating significant organizational upheaval across the platform holder’s development operations.