Microsoft Set to Announce Another Round of Layoffs at Xbox Division Next Week

Image: Xbox

Microsoft is reportedly preparing to carry out another wave of layoffs within its Xbox division, with the cuts expected to be announced next week. This development comes as part of a broader restructuring effort inside the company, timed around the end of Microsoft’s fiscal year on June 30.

According to a report from Bloomberg, the upcoming layoffs are described as “major,” though specific teams or departments affected have not been publicly identified.

This would mark the fourth major layoff event at Xbox in the past 18 months. Previous rounds included the elimination of over 1,900 jobs shortly after the Activision Blizzard acquisition closed in early 2024, followed by further job losses and studio closures throughout the year. Notably, three ZeniMax Media studios were shut down in May 2024, and another 650 Activision-related roles were cut later that September.

Adding to this, The Verge reported a shift in Xbox's distribution strategy across Central Europe, with operations ceasing in some regions. These changes suggest that Microsoft's gaming division is not just trimming down but also realigning its business approach in certain markets.

Despite these ongoing cutbacks, Microsoft has been performing strongly in terms of revenue. The company posted $70.1 billion in revenue and $25.8 billion in profit in its most recent quarterly report, with Xbox itself showing year-over-year growth. Titles like Call of Duty, Minecraft, and a growing Game Pass user base have continued to support the brand’s financial performance.

However, profitability hasn’t spared employees from job insecurity. Microsoft Gaming CEO Phil Spencer has previously stated that staff reductions are necessary to maintain Xbox as a sustainable business. Xbox president Sarah Bond’s comments on the layoffs have also faced criticism for lacking clarity and empathy.

Ironically, this wave of layoffs comes during a period of major releases and expansions for Xbox. Over the past few months, games like DOOM: The Dark Ages and Forza Horizon 5 (now also on PS5) have made strong impacts. The surprise drop of Oblivion Remastered also turned heads, becoming April’s best-selling title in the U.S. But behind these successes are thousands of workers, many of whom may soon find their futures uncertain once again.

It’s a familiar, exhausting pattern in the gaming industry—big numbers and exciting announcements on the front end, with workforce reductions quietly following behind.