As has become all too commonplace in the modern gaming industry, Microsoft has announced today that it’s making a 4% reduction to its global workforce. This large cut will impact over 9,000 employees throughout the company, including in sectors such as Xbox and the wider Microsoft Gaming branch.
Hard times
Microsoft confirmed this new round of layoffs today to The Seattle Times, though rumors have been circulating as early as a few days ago.
Much of the outcome involves significant reductions across key areas. For instance, Turn10 Studios, the maker of Forza Motorsport, is seeing a reduction of 70 people. King, the maker of the very popular Candy Crush mobile game, is seeing a cut of 200 people. ZeniMax has also been hit with staff reductions, in addition to Rare. The Initiative—a fairly young Xbox studio that was initially described as a ‘AAAA’ team will never ship a game as it’s now been shuttered.
In the hours following the initial announcement, more news has been pouring out from different affected employees and companies.
Other sectors suffering include reductions in the Xbox User Research Team, along with the Head of Xbox Family and Child Safety being laid off.
It was only back in January 2024 that Microsoft shed nearly 2,000 positions. More carnage came in May of this year with 6,000 positions being cut and then a further 305 were cut very recently in June.
There have been even more mass layoffs from Microsoft between 2024 and 2025, but today’s wave now adds a devastatingly large quantity to the pile.
From the top, down
CEO of Microsoft Gaming, Phil Spencer, delivered somber words in his memo addressing the layoffs. He cites growing strides in Microsoft’s gaming division as the reason for these cuts. As he puts it, “[to] allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness.”
He tries to cushion the blow by then mentioning that team-specific news would be coming from team leads, while also acknowledging the dichotomy of the circumstances.
“I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before,” says Spencer. Yet, he points to “tough decisions” that have been previously made as the reason for why these areas have been trending upwards. He continues, in part, “we must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities.”
He capped off his memo by stating that those impacted by the layoffs still have the opportunity to move around to another area of the Microsoft Gaming umbrella, “where their applications will be given priority review.”
It cannot be ignored that these cuts continue to happen not too long after Microsoft’s immensely expensive purchase of Activision-Blizzard back in 2023. It remains as the largest acquisition in the gaming world thus far (by a long shot), and was promised to usher in a new era of opportunity for both sides. Yet, that clearly has not panned out very nicely for either employees or the industry alike.
More from Xbox:
New Xbox consoles are coming—but where do they fit in? | Xbox’s first handheld — The ROG Xbox Ally coming in 2025 | Xbox Series X|S and its games see dramatic price increase
