Microsoft will eliminate around 9,000 jobs in a new round of layoffs that will substantially affect its Xbox business, leading to the closure of studios and cancellation of several game projects, company leaders told employees.
What Microsoft says and which teams are affected
Phil Spencer, head of Microsoft Gaming, informed staff that the cuts are intended “to position games for lasting success and allow the company to focus on strategic growth areas.” Despite strong company finances—including an 18% increase in net income year over year to US$25.8 billion—Microsoft says the restructuring is necessary for its future priorities.
The maker of Candy Crush, King, will reduce its workforce by about 10%, or roughly 200 employees. Other units such as ZeniMax have confirmed layoffs as part of the same wave. At Turn 10, the studio behind Forza Motorsport, approximately 70 employees will be impacted.
Closures and canceled game projects
The announcement includes the closure of The Initiative studio and cancellations of prominent projects. Among the games being dropped are Perfect Dark and Everwild. These specific project and studio changes were reported by The Verge.
Recent history of cuts in Microsoft’s gaming and tech units
The gaming sector at Microsoft has experienced multiple rounds of reductions over the past years:
- In January 2024, Microsoft cut about 1,900 roles across Activision Blizzard and Xbox.
- In May, the company closed several game studios and carried out additional layoffs.
- In June, roughly 1,000 roles were eliminated from HoloLens and Azure cloud teams.
- In September, Microsoft cut another 650 Xbox positions as part of a reorganization tied to the acquisition of Activision Blizzard.
Scale and context of the current reductions
The latest cuts—approximately 9,000 jobs—represent a significant portion of Microsoft’s workforce. Internal communications indicated these measures will lead to the winding down of certain Xbox divisions and the discontinuation of specific game development efforts as the company reallocates resources toward areas it deems strategic for growth.
