Microsoft has begun another wave of layoffs, targeting its Xbox division as part of a broader strategic overhaul. Reports suggest that up to 2,000 employees could be affected, with studio shutdowns and project cancellations underway.
Image source:- ET CIO
Microsoft Xbox Division Faces Major Restructuring
In a significant move shaking the gaming industry, Microsoft has reportedly laid off a large number of employees across its Xbox division. The layoffs are part of a broader realignment following the company’s strategic review of its gaming and content operations.
According to sources close to the matter, the restructuring may impact up to 2,000 positions, including key roles in game development and management. This comes after the tech giant recently closed down several underperforming studios, including some acquired during its purchase of ZeniMax Media and Activision Blizzard.
Studio Shutdowns and Realignment
Multiple gaming studios under the Xbox umbrella are rumored to be on the chopping block. While Microsoft has not officially disclosed all affected units, industry insiders suggest that teams not aligned with the company’s new focus on cloud gaming, Game Pass, and first-party content are at the highest risk.
The layoffs also reportedly affect developers working on major franchises that have not met expectations in performance or delivery timelines.
Microsoft’s Focus Shifts to Core Gaming Strategy
This move aligns with CEO Satya Nadella’s larger push to streamline operations and shift resources toward areas of high growth, including AI integration and cloud infrastructure. Gaming remains a pillar of Microsoft’s consumer business, but the company is now more selective about where it places its bets.
Xbox’s cloud-based offerings, such as Xbox Game Pass and xCloud, are expected to receive more attention and investment moving forward. However, this comes at the cost of cutting legacy teams and revisiting long-term game development plans.
Industry Reactions
The layoffs have drawn criticism from both employees and the broader gaming community. Many point out the irony of Microsoft executing layoffs shortly after closing one of the biggest gaming acquisitions in history — Activision Blizzard — for $69 billion.
Gamers and analysts alike are watching closely to see how Microsoft balances its ambitious expansion with internal upheaval.
