Microsoft to cut 3,200 Xbox jobs and spin off 4 studios in unprecedented restructuring

Microsoft to cut 3,200 Xbox jobs and spin off 4 studios in unprecedented restructuring

In what feels like an endless streak of bad news for the gaming industry, Microsoft, and specifically Xbox, is now preparing its largest workforce reduction to date. Around 3,200 roles are expected to be eliminated by fiscal year 2027, with the first wave affecting immediately about 1,500 employees as part of broader Microsoft layoffs. Cuts or restructuring are planned across every Xbox department, while CEO Asha Sharma told staff that the business is losing 64 cents for every dollar invested, framing the move as the most significant restructure in Xbox history.

As part of the reorganization, Microsoft has reached deals for four Xbox studios to leave the company instead of closing. Compulsion Games and Double Fine Productions will be acquired by their management teams (thank goodness), while Undead Labs and Ninja Theory will move to new publishers. No announced projects have been cancelled so far, and State of Decay 3 and Senua remain in production. Arkane’s future is still uncertain, though Microsoft is reportedly working with French authorities to keep the studio operating and preserve development on Blade.

Xbox also plans to reduce middle management, while Minecraft and King (Candy Crush Saga) will begin reporting directly to Xbox leadership to compete more closely with major rivals. Hardware appears to be less affected, with Microsoft still committed to future Xbox devices, including their next generation Xbox Helix project. As a final note, The New York Times revealed that the current number of Xbox Game Pass users is 30 million, far below the 77 million the company had aimed to reach by 2026, so draw your own conclusions.

by Mauricio B. Holguin

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Comments

Creative_joe
3

Cheap and greasy AI slop image. Also, your comment summary bot is absolutely useless. Stop trying to push this fad everywhere like it is a real thing.

4 replies
Creative_joe

I mean, this is clearly a knockoff! I don't know what went through your heads to share this since gemini can't do anything original.

Krazyplays

Agree. I really like getting the Info, just the overkill AI images and the text trying extra hard to set an opinion... Everbody hates corporate over-"optimizing" and them milking companies, but xbox's failing, it's not their choice by now. Not a great job at running it though, but thats not mentioned... Just "largest firing, 3,200 Jobs, they close 4! studios, unprecedented" and then that image. That's what sticks with thousands of people, yet the thing that their headoffice did was not run the place better, like almost every other big corp, and then loosing to Playstaion. Just a handful of words more and understanding offers itself...

Mauricio B. Holguin

Thanks for the feedback, we’ll keep it in mind and try to be even more neutral. In this case the emphasis on things like unprecedented restructuring is not really an opinion, but rather what Asha Sharma herself has been publicly highlighting as her main goal since recently taking the CEO role, which is why I mentioned it.

As Krayplays mentioned, we could say the gaming industry in general has been hugely affected by the recent RAM crisis (just look at the price of the Steam Machine) but that doesn’t make this any less bad news, especially considering how much poor executive management has played into it. In Xbox’s case, I do think Phil Spencer had good intentions, giving studios like Double Fine creative freedom, but there clearly wasn’t enough stronger management, and decisions like the Activision acquisition were not really as amazing as we were promised. Even Game Pass, the “best deal in gaming,” has been stagnant for years.

Krazyplays

I Agree :) Now you're adding just few details that suddenly widen the topic for thought and understanding (e.g poor management). The firing sucks, the management is poor (again like any other corp, take EA and Ubisoft e.g.) and the whole gaming bubble has alot to discuss and be cautious or be it angry about. But theres no caution and discussion without understanding, so be proud to do it. Especially now that that motivation is dying out. I'm not saying avoid negativity / have a positive conclusion (although that would be epic - like listing options / alternatives :P), but saying "Xbox has huge layoff, company making losses, every other console did it a bit better, etc" does the job. Ofc not that neutral, but the heavy lean should come in ones head (and in the comments duh). Society knows that you now can and should be angry at wrong things. Just go on reddit or Twitter.

UserPower
3

Good news if Double Fine hasn't have to close. Hope Arkane will also survive. I don't care about Mojang, King and Activision (i.e. the studios Microsoft paid much too high). But it's always the same big company empty promises about investing for more competition and better products when it's just burning a giant pile of cash hoping for the best. And 30 million Pass subscribers, the same number as Copilot paying users, is pathetic.

Gu