Microsoft is planning a second major wave of layoffs at its Xbox gaming division, laying off hundreds more employees this week, while also considering the possibility of consolidating several prominent game studios.
Microsoft is planning a second major wave of layoffs at its Xbox gaming division, laying off hundreds more employees this week, while also considering the possibility of consolidating several prominent game studios.
This is reported by The Information, citing its own sources familiar with the corporation's plans. Although the exact format of the studio merger is not yet disclosed, it is expected that internal mergers and rearrangements will affect the publishing branches of Xbox Game Studios, Bethesda, Activision and Blizzard.
The division’s new CEO, Asha Sharma, is implementing a plan to return Xbox to growth, which involves “resetting” the entire structure. During a speech at the Bloomberg Tech conference this summer, she openly stated that the company’s gaming business is currently “not in a healthy state.”
This strategy has already led to the corporation ceasing cooperation with a number of controlled teams. In particular, developers Compulsion Games and Double Fine Productions have once again become fully independent studios, while Ninja Theory and Undead Labs are in the process of agreeing on the terms of the transition to new owners.
UPD. Microsoft is laying off over 260 Xbox employees and preparing to close Ninja Theory
The new wave of layoffs was revealed in a memo from Xbox chief content officer Matt Booty. The Ninja Theory sales woes were also confirmed by gaming host and insider Jeff Keeley. The measures are part of a previously announced plan to cut 3,200 jobs during the corporation's 2027 fiscal year, which ends in June 2027.
The current wave of layoffs includes 268 positions across Halo Studios, other proprietary studios, XGS leadership and corporate headquarters. “The actions taken since July, including the sale of studios, bring us approximately three-quarters of the way to completing our previously announced restructuring,” said Matt Booty.
In addition to personnel decisions, Microsoft planned to sell four of its own studios. Double Fine and Compulsion Games have successfully gained independence, and negotiations for Undead Labs are still ongoing. However, negotiations to sell Ninja Theory have reached an impasse. According to Jeff Kiely, a potential buyer has withdrawn from the deal, which is why Xbox is preparing to close the studio.
"Unfortunately, two separate deals for Ninja Theory have fallen through. We will now begin consultations with employees regarding the proposed closure while continuing to explore other avenues for growth," Boothe explained in a memo.
The developments are a continuation of the company's ongoing cost-cutting efforts. In July , Microsoft already carried out large-scale layoffs at Xbox , affecting 1,600 employees, mainly at ZeniMax Online and Doom series developers from id Software. At the time, it was reported that it would cut another 1,600 jobs by the end of the company's fiscal year.
