Currently, mass layoffs at Xbox seem imminent. There could be several studio closures. According to insiders, this could be the largest wave of layoffs in Xbox’s 25-year history.
What layoffs are expected? As reported by Jason Schreier on BlueSky, there are supposed to be massive layoffs at Xbox, but only after the end of the current fiscal year. Still, the company is reportedly terminating its contracts now, especially with external service providers. Also, Insider Gaming is already aware of who is affected:
- Today, the first layoffs are supposed to happen at Assembly. This firm has been the main PR company for Xbox in recent years.
- Famous development studios like Double Fine (Keeper), Undead Labs (State of Decay), Compulsion (South of Midnight), and Ninja Theory (Hellblade) could possibly be closed or significantly downsized. The only salvation would be a buyer for the development studios.
- Even at large developer studios like Blizzard and Bethesda, percentage reductions are expected.
In total, this could lead to hundreds of job cuts, which would likely be the largest single wave of layoffs in Xbox’s 25-year history.
Therefore, there is currently sharp criticism from Microsoft employees in the Xbox division against the management. The affected employees, represented by the Communications Workers of America (CWA), are publicly opposing the impending mass layoffs and possible studio closures.
Employees are resisting, do not want to be disposable
How are the employees resisting? The employees accuse the management of treating developers as disposable. There is indeed money available. After all, Microsoft has just raised console prices and is simultaneously investing billions in artificial intelligence. CEO Satya Nadella is said to have earned 96 million dollars last year.
Mahreen Fatima, who has been working in video games for seven years and is currently a Senior Environment Artist at Blizzard, says the following:
During this time of layoffs, it feels like there is no difference between a fixed-term contract and a permanent position – in the eyes of the company, we are all equally dispensable.
Source: GamesBeat
Other employees also agree with her and repeatedly emphasize the aspect of disposability and that they are replaceable.
Therefore, the union demands fundamental protective measures that should apply to all Xbox employees. These include:
- early announcements of layoffs
- fair severance packages
- the right to rehire
A bitter taste would come from the closure of the development studio Compulsion Games. After all, this studio was responsible for Xbox winning one of the few Game Awards last year: Xbox is likely to lay off developers who won one of the few Game Awards 2025 for Microsoft
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