Xbox Layoffs Hit Hard: Over 9,000 More Jobs Cut, Major Games and Studios Shut Down

Xbox has just cut another 9,000 jobs, and the aftermath is pretty devastating. From long-awaited games being cancelled to entire studios shutting their doors, the impact of this latest round of layoffs is huge. Combined with earlier cuts over the past two years, Microsoft’s gaming division has now let go of more than 20,000 people since announcing its $68.7 billion acquisition of Activision Blizzard King.

The layoffs were officially confirmed on July 2 (via Bloomberg), following a week of rumors and growing concern within the industry. Unfortunately, what many feared has now come true — and it's not just about job losses. A number of big projects, including games that fans had been looking forward to for years, have been completely scrapped.

One of the most shocking cancellations is the Perfect Dark reboot. Originally revealed in 2018, it was supposed to be a bold comeback for the beloved franchise from the Nintendo 64 era. Microsoft even built a new studio, The Initiative, specifically for the project. After years of slow and troubled development, it finally looked like things were coming together when a new trailer was shown at the 2024 Xbox Games Showcase. But now, that excitement has turned to disappointment — The Initiative has been shut down, and the reboot is officially cancelled. There are even rumors floating around that the trailer wasn’t real gameplay, though that’s still unconfirmed.

The Perfect Dark trailer was shown at the 2024 Xbox Games Showcase

Another big loss is Everwild, a project from Rare that had been in the works since 2014. Despite being one of the studio’s most mysterious and ambitious titles, and even having Xbox boss Phil Spencer say it was the game he was most excited about, it’s also been axed as part of the cuts. Gregg Mayles, the legendary designer behind Banjo-Kazooie and Sea of Thieves, is also leaving Rare after 35 years. He had been leading Everwild since its reported reboot in 2021.

Everwild

Banjo-Kazooie and Sea of Thieves Director Gregg Mayles is leaving Rare after 35+ years following the cancellation of Everwild.

The damage doesn’t stop there. As per Windows Central, ZeniMax Online Studios — the team behind The Elder Scrolls Online — had a secret MMO codenamed Project Blackbird in development. That game has now been cancelled too. Studio head Matt Firor has since announced his departure, adding to the growing list of exits.

Blizzard’s mobile game Warcraft Rumble, which launched in 2023, is also winding down. While the game will still get basic updates and bug fixes, there won’t be any new content going forward. According to Aftermath, up to 100 employees could be affected by the shift, with some being reassigned and others let go.

Even studios that weren’t working on cancelled games haven’t been spared. The Verge reported that Turn 10 Studios, known for Forza Motorsport, is losing more than 70 team members — nearly half of its staff. Meanwhile, CharlieIntel sources say the layoffs have hit multiple Call of Duty developers, including Sledgehammer Games, Raven Software, and High Moon Studios. There are also whispers about cuts at 343 Industries and Undead Labs, but nothing has been confirmed there yet.

Update: Halo Studios developer told Engadget that "at least five employees" were let go from the Halo team as part of Microsoft's cuts.

All in all, this latest wave of layoffs has sent shockwaves through the gaming world. It’s not just about cutting costs — it’s reshaping the future of Xbox in a major way, and right now, a lot of developers and fans are left wondering what comes next.