Microsoft to cut 3,200 Xbox jobs and spin off 4 studios in unprecedented restructuring

In what feels like an endless streak of bad news for the gaming industry, Microsoft, and specifically Xbox, is now preparing its largest workforce reduction to date. Around 3,200 roles are expected to be eliminated by fiscal year 2027, with the first wave affecting immediately about 1,500 employees as part of broader Microsoft layoffs. Cuts or restructuring are planned across every Xbox department, while CEO Asha Sharma told staff that the business is losing 64 cents for every dollar invested, framing the move as the most significant restructure in Xbox history. As part of the reorganization, Microsoft has reached deals for four Xbox studios to leave the company instead of closing. Compulsion Games and Double Fine Productions will be acquired by their management teams (thank goodness), while Undead Labs and Ninja Theory will move to new publishers. No announced projects have been cancelled so far, and State of Decay 3 and Senua remain in production. Arkane’s future is still uncertain, ...