Microsoft’s XBOX Layoffs Will Fall Short of Previously Stated
Microsoft’s Xbox division continues its major restructuring, with recent developments indicating the originally announced job cuts will fall short of expectations. The company announced 3,200 gaming workforce reductions in July as part of a plan to cut 20% of its organization over 12 months, but reports suggest this figure won’t be reached as some roles are being restructured or transferred to other departments rather than eliminated.
The strategy has included several divestitures, with studios Double Fine and Compulsion Games returning to independent status, and Undead Labs (developer of State of Decay 3) also spinning off. Additionally, on September 22, Xbox announced an additional 268 job cuts impacting Halo Studios and other first-party teams, representing the second major phase of cuts.
The restructuring has affected multiple studios, including Ninja Theory, which faces potential closure after failing to secure a buyer, while negotiations to offload Arkane Studios remain ongoing. Developers at The Coalition, World’s Edge, Treyarch, and Raven Software have confirmed layoffs within their teams. A significant organizational shift involves Halo Studios transitioning under Activision’s oversight as part of the broader restructuring efforts.
This ongoing restructuring represents a significant contraction in Xbox’s first-party game development capabilities, though the exact final headcount remains unclear as Microsoft continues to reshape its gaming portfolio through both layoffs and strategic divestitures.