Just weeks after an exciting Xbox Games Showcase, Microsoft is reportedly preparing for another wave of Xbox layoffs next week, according to a new report by Bloomberg’s Jason Schreier. The job cuts are said to be part of a broader restructuring effort across Microsoft, affecting not just gaming but also sales and other corporate departments.
The timing is striking, as Xbox just unveiled a slew of new projects and hardware during its June event. Highlights included the official release date for The Outer Worlds 2 (October 29), the reveal of Double Fine’s next game Keeper, and the introduction of the ROG Xbox Ally, a handheld device that supports native Xbox gaming on the go.
Despite this forward-looking presentation, Microsoft appears to be continuing its cost-cutting strategy across the Xbox division.
Industry-Wide Trend Hits Xbox Hard
Since 2022, the gaming industry has been hit by an ongoing wave of layoffs, and Microsoft alone has cut nearly 3,000 Xbox jobs over the past three years. Teams like 343 Industries—best known for Halo—suffered major talent losses, particularly among their single-player development team. This has reportedly prompted a shift away from continuing Halo Infinite, with rumors pointing toward a reboot of the franchise using Unreal Engine 5.
Perhaps even more dramatic was the closure of four Bethesda studios in 2024, including Alpha Dog Games, Roundhouse Studios, Arkane Austin, and Tango Gameworks. The closure of Tango was met with fierce backlash from fans, especially after the studio’s game Hi-Fi Rush was praised by Xbox leadership as a breakout hit. The studio later found a new home under South Korean publisher Krafton.
What This Means for Xbox’s Future
According to Schreier’s report, the upcoming layoffs are tied to a Microsoft-wide reorganization and will impact “a significant number” of Xbox staff. With many fans and industry watchers still reeling from the previous rounds of cuts, this news has reignited concerns about the direction of Microsoft’s gaming division.
While Xbox is pushing forward with promising projects and new hardware, these layoffs raise questions about how sustainable its current business model is—and whether its ambitious slate of games will be affected by the shrinking workforce.
Looking Ahead
Microsoft has not yet commented publicly on the report, but announcements are expected early next week. The Xbox layoffs 2025 situation continues to evolve, and fans will be watching closely for updates as the company navigates another difficult moment in the ever-changing gaming industry.