Microsoft’s games division is continuing to experience mass layoffs. According to a warning by Jason Schreier on Bloomberg, Xbox will undergo another significant round of layoffs next week.
The exact number of people to be laid off is unknown; however, a source at Bloomberg has confirmed that the figure will involve “substantial numbers.”
In addition to the layoffs in the gaming division, layoffs are also expected to occur across Microsoft’s entire sales area. It is worth remembering that the company’s fiscal year ends on June 30, and this period is almost always marked by major organizational changes in the company.
Xbox Dismissal History
This will mark the fourth round of layoffs at Xbox in the last 18 months, and they can be viewed as a direct consequence of the acquisition of Activision/Blizzard – a nearly $70 billion transaction finalized in October 2023.
In January 2024, a wave began with the dismissal of 1900 individuals from the Xbox division at Bethesda and Activision.
Several months later, we learned about the closure of multiple studios acquired by Microsoft, including Arkane Austin (known for Prey and Redfall) and Tango Gameworks (recently given approval to develop a sequel to Hi-Fi Rush just weeks before the studio’s shutdown).
In September 2024, a third round of significant workforce reductions took place, resulting in the dismissal of 650 employees from studios under the company’s ownership. Although this latest reduction did not involve shutting down any studios or canceling any projects, it reportedly impacted the development timelines of certain initiatives, including State of Decay 3 from Undead Labs.
This upcoming round of layoffs at Microsoft’s Xbox division will take place less than a month after the Summer Game Fest, during which Phil Spencer, CEO of Xbox, emphasized his commitment to maintaining a profitable business unit.
Given that Microsoft recently paid nearly US$70 billion in cash to acquire Activision/Blizzard, ensuring profitability must be particularly challenging due to the significant financial commitment required for this acquisition.
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In related industry news, Electronic Arts (EA) recently made headlines by canceling the “Black Panther” game and shutting down Cliffhanger Games, as part of a broader restructuring effort aimed at focusing on key franchises like Battlefield and Star Wars Jedi. Marcus Thompson delves into the implications of this move in his detailed analysis published on May 28th, exploring how this decision impacts EA’s relationship with Marvel and the future prospects for industry professionals affected by these changes at Black Panther: EA Cancels Game and Shuts Down Cliffhanger Games, Massive Housecleaning Continues. In similar troubling news for the gaming industry, Build a Rocket Boy Studio (BARB) is gearing up for significant layoffs following the catastrophic failure of their flagship game, MindsEye. Founded by ex-Rockstar producer Leslie Benzies, BARB’s ambitious plans have hit a roadblock with MindsEye failing to meet expectations despite substantial investments. With around 100 employees facing job cuts out of a total workforce of roughly 500 across the UK and internationally, it’s clear that this studio is navigating through tough times. For more details on how BARB hopes to recover from this crisis, be sure to check out Marcus Thompson’s latest piece over at Players for Life Build a Rocket Boy Studio Plans Mass Layoffs Following MindsEye Disaster. As we delve into the ongoing changes at Microsoft and Xbox, it’s fascinating to see how these shifts impact individual careers within the gaming industry. A recent notable departure is that of Carrie Patel from Obsidian Entertainment, as detailed in Carlos Mendoza’s piece on Players for Life (May 26, 2025). Patel, a key player at Obsidian for twelve years, has now taken on a new role as game director at Night School Studio, a subsidiary of Netflix Games. This transition marks both an exciting new chapter for Patel and the conclusion of her long-standing tenure at Obsidian under Xbox Game Studios. For more insights into this career move and its implications, be sure to check out After Avowed, Carrie Patel Bids Farewell to Obsidian and Looks to Netflix for Her Future.
