Microsoft has confirmed it is laying off 9,100 employees, or about 4% of its workforce, in another round of layoffs that has hit its Xbox division, known as Microsoft Gaming, hard, and has seen a number of previously announced games canceled.
Microsoft has confirmed it is laying off 9,100 employees, or about 4% of its workforce, in another round of layoffs that has hit its Xbox division, known as Microsoft Gaming, hard, and has seen a number of previously announced games canceled.
«To ensure [Microsoft] Gaming continues to be successful and allow us to focus on strategic growth areas, we will be closing or reducing operations in certain areas of the business and following Microsoft’s lead in reducing our management team to improve agility and efficiency,» Xbox chief Phil Spencer said in a memo to employees, according to The Verge.
The layoffs will reportedly affect King, the studio now owned by Microsoft and developer of the Candy Crush series. It is cutting about 10% of its staff, or 200 people. Other European units, such as Zenimax, have also confirmed job cuts.
According to sources at VGC, employees at Rare, the studio known for the pirated online game Seas of Thieves, also lost their jobs, and its new project Everwild, which was announced in 2019, was canceled. It had been in development for about 10 years and recently received a reboot.
The massive layoffs at Microsoft come less than two months after the company announced it was cutting more than 6,000 employees, and another 305 in early June. Microsoft employees say they have faced a series of layoffs over the past year that have seriously dented their morale.
In winter 2025, Microsoft reported quarterly revenue growth from Xbox content and services of 2%, largely driven by a record quarter for Game Pass subscriptions. It noted that PC Game Pass subscribers grew by 30%, with games like Call of Duty: Black Ops 6 and Indiana Jones and the Great Circle contributing to the service’s success.
«I recognize that these changes are coming at a time when we have more players, games, and hours of play than ever before. Our platform, hardware, and gaming roadmap have never been stronger. The success we are seeing now is built on the tough decisions we made earlier. We must make choices now to ensure continued success in the future, and a key part of that strategy is the discipline to prioritize our strongest opportunities,» Phil Spencer said in his statement.
He added that laid-off employees can consider open positions at Microsoft Gaming, where their applications will be considered on a priority basis.
«We’re really successful right now, but you’re fired,» Tom Henderson, a well-known gaming journalist and founder of Insider Gaming, sarcastically summed up Spencer’s words.
