Report details fear after Microsoft Xbox layoffs

A new report has described an atmosphere of uncertainty and fear among remaining staff at Xbox following recent restructuring by Microsoft.

Microsoft announced its Xbox restructuring last week, laying off 1,600 people immediately and planning another 1,600 cuts by next summer.

Staff were kept in the dark about the changes for weeks after initial reports emerged. When announcements arrived, many received only brief one-way video calls with no opportunity to ask questions.

At id Software, affected employees learned of their layoffs just 10 minutes before meetings, after which their access to Slack and email was revoked. The studio lost 136 staff, including 90 percent of its AI and gameplay oversight team.

Sources expressed concern over lost institutional knowledge and the impact on core franchises such as Fallout and The Elder Scrolls. Microsoft also shed studios including Double Fine, Compulsion, Ninja Theory, Undead Labs and Arkane.

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News illustration showing the impact of Xbox layoffs with employees in an office packing boxes.
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Xbox announces 3200 layoffs in major restructuring

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Microsoft cut 3200 jobs at Xbox on July 6 as part of the largest restructuring in the division's history. Half the reductions took effect immediately, with the rest scheduled through June 2027. Four studios are leaving the company through spin-offs or sales.

Microsoft is preparing mass layoffs that could affect up to 5,500 employees, with roughly 1,000 positions potentially eliminated in the Xbox division.

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Microsoft's communications lead addressed claims that recent Xbox layoffs aimed to replace American workers with foreign hires. The company cut over 3,000 positions to restructure the division.

id Software has pushed back against reports that recent Xbox layoffs have severely reduced its workforce. Co-studio director Hugo Martin addressed the concerns during a recent livestream.

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Microsoft is reportedly weighing the closure of Undead Labs, the studio behind the State of Decay series, as part of a broader reset of its Xbox division. The move could affect 110 jobs at the studio, which is currently developing State of Decay 3.

Xbox is preparing to shut down Compulsion Games and is in talks to close Double Fine and Ninja Theory as well. Studio leaders are negotiating with Microsoft over the studios' futures. Heavy job losses are expected even if some studios go independent.

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Xbox CEO Asha Sharma and Xbox Game Studios Head Matt Booty emailed employees on June 10 with a blunt message that current operations cannot continue. The note outlined five harsh realities facing the division, including low profits and rising costs. Bloomberg separately reported that major layoffs are planned for next month.

 

 

 

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