image credit Xbox
đ„ 4% of Workforce Let Go in Newest Round of Layoffs
Microsoft has announced another round of sweeping layoffs that affect approximately 4% of its global workforce, equating to 9,100 employees. The move is part of a broader effort by the tech giant to streamline operations and prioritize key areas of growth across all divisions, including its multi-billion-dollar gaming sector.
The company currently employs over 228,000 people globally, making these layoffs one of the most significant cuts in recent years.
đź Xbox and Activision Blizzard Hit Hard Once Again
Microsoftâs gaming divisionâwhich includes Xbox, ZeniMax Media, and Activision Blizzardâhas once again found itself in the eye of the storm. These layoffs mark the fourth major wave of job losses in the companyâs gaming arm over the past 18 months, as the company continues to restructure following its $69 billion acquisition of Activision Blizzard.
Employees across various game studios were notified earlier today via a memo from Xbox chief Phil Spencer, who acknowledged the severity of the decision while stressing its strategic necessity.
đ Phil Spencerâs Message to Staff
In his internal message, Spencer said:
“To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business… I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger.”
While Phil Spencer avoided disclosing exact departments or studios affected, he confirmed that team leaders would relay organizational changes in the coming days. He also acknowledged the emotional and professional impact of the decision:
âThese decisions are not a reflection of the talent, creativity, and dedication of the people involved⊠HR is working directly with impacted employees to provide severance, healthcare, and job placement assistance.â
đ« Games and Studios Affected by the Layoffs
The latest wave of layoffs hasnât just affected personnelâit has also led to major project cancellations across Xbox Game Studios:
- đ Perfect Dark â The long-awaited reboot of this classic IP has reportedly been canceled, and its developer, The Initiative, has been shut down.
- đ Everwild â The ambitious, stylized action-adventure game from Rare has also been canceled after years of silence and internal reboots.
These cancellations reflect Microsoftâs renewed focus on prioritizing projects with the highest growth potential, as mentioned in Phil Spencerâs internal memo. Unfortunately, this has also meant pulling the plug on several high-investment but high-risk titles.
đ A Timeline of Microsoft Gaming Layoffs (2024â2025)
| Date | Layoffs | Details |
|---|---|---|
| Jan 2024 | 1,900 staff | Following Activision acquisition |
| May 2024 | 6,000 staff | Company-wide cuts including game development units |
| Sep 2024 | 650 staff | Layoffs across Xbox Game Studios |
| Jul 2025 | 9,100 staff | Includes multiple gaming teams and canceled projects |
Earlier this year, Microsoft also closed Arkane Austin (developers of Redfall) and Tango Gameworks (Hi-Fi Rush), compounding concerns about the long-term health of Xbox’s internal development ecosystem.
đ§ Strategy Over Sentiment
Despite these massive cuts, Microsoft continues to express confidence in the future of its gaming platforms. Phil Spencer stated that while the company currently sees success across its platforms and services, tough decisions are needed to ensure long-term sustainability and growth.
âWe must make choices now for continued success in future years… This focused approach means we can deliver exceptional games and experiences for players for generations to come.â
The layoffs appear to be part of a broader trend in Microsoftâs organizational overhaul, where âlayers of managementâ are being removed to promote agility and execution.
đčïž What’s Next for Xbox?
The timing of the layoffs is particularly striking. Microsoft has recently confirmed the development of next-gen Xbox consoles and has promised a strong lineup at Gamescom 2025. This contradictionâbetween bold public announcements and internal downsizingâhas left fans and analysts puzzled.
Despite the grim news, Microsoft insists that the future of Xbox remains strong and that the company is focused on high-impact investments and game releases.
đ Inside Employee Reactions
While no official list of affected teams has been released, reports suggest that internal staff had been anticipating this round of layoffs. Anxiety had been rising across multiple divisions following earlier closures and a noticeable reduction in project visibility. Employees are reportedly shaken, frustrated, and uncertain about what comes next.
đ Final Thoughts
While Microsoft continues to invest in new hardware and software initiatives, the reality for thousands of employees is starkly different. The layoffs are a painful reminder that even in times of success, corporate restructuring can drastically alter the course for individuals and studios alike.
As Microsoft pushes forward with its gaming ambitions, only time will tell if this “focused approach” will pay off, or if it’s a warning sign of deeper instability in the gaming industry.
