- Xbox announced it was undergoing a “significant restructuring”
- This will include the loss of 3,200 jobs this financial year.
- This includes 1,600 job cuts today
Microsoft announced that Xbox will undergo the “largest restructuring” in the history of the brand, with 1,600 job cuts today, for a total of 3,200 jobs in the coming months, including four studios being laid off.
In another blow to the people who make the games we love, there were strong rumors that these layoffs would take place this week – the extent of which was unknown but was expected to be significant. It turns out it was true.
In an email to Xbox employees that was made public via Xbox Wire, Xbox CEO Asha Sharma began by stating: “After careful consideration, I have made the difficult decision to reduce our team by approximately 3,200 people in FY27. This will include approximately 1,600 job cuts today, and in addition, four studios will leave Xbox to new management.
Sharma added: “Our business today is not healthy. We operate at margins 3-10 times lower than comparable platform and publishing companies. We entered generation 9 with a smaller install base and higher cost structure. To grow, we are betting on Game Pass, cross-platform and a broader content portfolio. Although these companies have created significant value, they have not grown at the rate that We were waiting.”
In addition to the 3,200 jobs created during this financial year, four studios are also affected. Compulsion Games and Double Fine Productions are becoming independent studios again, while Ninja Theory and Undead Labs will get new owners with funding to complete their next games, Senua And State of decomposition 3.
Arkane, a much-feared studio as this restructuring approaches, “is beginning the necessary consultation with its works council to examine possible strategic options”.
In a series of moves over the past decade that have seen Microsoft acquire multiple studios, spend billions and billions of dollars, and make curious decisions regarding Game Pass, pricing and more – all to move the brand from third place in the console space to, well, third – this feels like a bubble bursting before our eyes. And those who pay the price will be the developers who create the games we all love to play.
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