Microsoft’s Xbox division is reportedly bracing for another round of significant layoffs next week, continuing a trend of workforce reductions across the company unfolding over the last 18 months. This development adds to the uncertainty surrounding Xbox’s internal operations as the gaming giant reorganizes its priorities.
According to a Bloomberg report citing anonymous sources, these cuts are part of a broader company-wide restructuring effort. Earlier reports indicated that Microsoft was planning to reduce thousands of jobs, mainly in sales, but now it seems the Xbox division will also face significant reductions.
Interestingly, this will mark Xbox’s fourth major round of layoffs over the past year and a half. In January 2023, Microsoft announced plans to cut around 10,000 employees, impacting about 4.5% of its workforce. While that wave affected the company broadly, it also hit key studios like Bethesda Game Studios and 343 Industries, the latter known for Halo Infinite. 343 Industries reportedly saw heavy cuts, especially among staff working on single-player projects.
Fast forward to January 2024, and another 1,900 employees across Xbox, Bethesda, and Activision Blizzard were let go. Phil Spencer, Xbox’s head honcho, explained that leadership teams from Microsoft and Activision Blizzard had aligned on priorities and identified overlapping roles, which led to those decisions.
In September 2024, Microsoft cut about 650 more jobs within its gaming division, mostly targeting corporate and support functions. Spencer described that as part of organizing the business for “long-term success.” A few months later, in January 2025, unspecified layoffs hit multiple divisions, including Xbox’s security, sales, and gaming teams.
Wow, that’s a lot of cuts in a relatively short period. One must wonder how long the Xbox division can keep adjusting before it affects game development or innovation. Or is this just the price of staying competitive in a brutal industry?
