Microsoft Denies Layoffs at Xbox Studios
Following a recent organizational shake-up in its Xbox division, Microsoft has stated that the changes will not result in layoffs for its game studios. The clarification comes amid ongoing workforce reductions across the broader technology sector. Microsoft's statement aims to provide a note of stability for its gaming development teams.
- The recent reorganization saw longtime Xbox head Phil Spencer retire, with Asha Sharma taking over as the new CEO of Microsoft Gaming. Matt Booty was promoted to Chief Content Officer, overseeing the company's nearly 40 development studios. - This clarification follows several rounds of major layoffs at the parent company; Microsoft cut about 10,000 jobs in 2023 and has laid off over 15,000 employees in 2025. - The gaming division specifically has faced multiple rounds of cuts in the last 18 months. In January 2024, Microsoft laid off 1,900 employees from its Xbox, Activision Blizzard, and ZeniMax teams. - The wider gaming industry has been contracting, shedding an estimated 45,000 jobs between 2022 and mid-2025. The tech sector as a whole has seen more than 244,000 job cuts in 2025 alone. - These internal changes come after Microsoft's $68.7 billion acquisition of Activision Blizzard in 2023, which brought increased pressure on the Xbox division to improve its profit margins. - In the final three months of 2025, Microsoft's gaming division revenue saw a 9.4% decrease, with revenue from Xbox console sales falling by 32%. - In May 2024, Microsoft shut down several of its acquired game studios, including Arkane Austin and Tango Gameworks.
