Xbox Layoffs: Microsoft to Cut 3,200 Jobs and Divest 4 Gaming Studios
Microsoft will cut 3,200 Xbox jobs and divest four studios, including Ninja Theory and Double Fine, as part of a major business restructure. CEO Asha Sharma confirmed the phased layoffs, representing 20% of the division's staff, while reallocating content funding to focus on key growth franchises.
Microsoft has initiated a comprehensive restructuring of its Xbox gaming division, announcing plans to cut approximately 3,200 jobs, nearly 20% of the division’s total workforce. The layoffs, confirmed by Xbox Chief Executive Asha Sharma, will be executed in two phases: 1,600 staff will be impacted this week, with an additional 1,600 roles to be phased out throughout the remainder of the fiscal year.
Microsoft Xbox Layoffs: A Significant Corporate Restructuring
The move is being described as the most significant restructuring in the history of the Microsoft-owned entity. As per a report by The Wall Street Journal, the workforce reductions are designed to stabilise the struggling business and improve long-term profitability. These cuts are expected to impact teams across various entities under the Xbox umbrella, including Activision, Blizzard, Bethesda, King, Mojang, and XBOX Game Studios.
Divestment of Gaming Studios
Alongside the staffing reductions, the company has announced the divestment of several high-profile game development studios. As per a report by Variety, Ninja Theory, Undead Labs, Compulsion Games, and Double Fine Productions, collectively employing around 350 people, are set to be sold or spun out. Ninja Theory and Undead Labs are expected to be sold to third-party buyers, while Compulsion and Double Fine will be returned to their management teams, granting them control over their own intellectual property and revenue streams.
Strategic Reallocation of Content Spend
While the division is undergoing major personnel and structural changes, Microsoft intends to maintain its overall investment in content development at levels comparable to the previous record-breaking fiscal year. However, the allocation of these funds will be refined, with the company prioritising major franchises such as "Minecraft" and "Elder Scrolls" for future growth. The restructuring is part of a broader "reset" strategy, though the company has clarified that no previously announced first-party games or active projects are being cancelled as a result of these staffing adjustments.
(The above story first appeared on LatestLY on Jul 06, 2026 07:33 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
