- Xbox has announced that it is undergoing a “significant restructuring”
- This will include the loss of 3,200 jobs during the fiscal year.
- This includes the loss of 1,600 jobs currently.
Microsoft has announced that Xbox will undergo the “most significant restructuring” in the brand’s history, cutting 1,600 jobs today, for a total of 3,200 jobs in the coming months, including four studios that will be scrapped.
In another crushing blow to the people who make the games we love, these layoffs were heavily rumored to be coming this week; The magnitude was unknown, but it was expected that they would be large. Turns out that was true.
In an email sent to Xbox employees that has now been made public via Xbox Wire, Xbox CEO Asha Sharma began by saying, “After careful consideration, I have made the difficult decision to reduce our team by approximately 3,200 during FY27. This will include approximately 1,600 role eliminations today and, in addition, four studios will leave Xbox to new management.”
Sharma added: “Our business today is not healthy. We are operating on margins that are 3 to 10 times lower than comparable platform and publishing businesses. 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. While those businesses have created significant value, they did not grow at the pace we expected.”
In addition to the total of 3,200 jobs that will be eliminated this fiscal year, four studios will also be affected. Compulsion Games and Double Fine Productions will once again be independent studios, while Ninja Theory and Undead Labs will gain new owners with funding to complete their next games. Senúa and State of Decay 3.
Arkane, a studio that many feared in the run-up to this restructuring, is “beginning the necessary consultations with its works council to review possible strategic options.”
In a series of moves over the last decade, which has seen Microsoft acquire multiple studios, spend billions and billions of dollars, and make some curious decisions about Game Pass, pricing, and more, all to take the brand from third place in the console space to third place, this feels like the bubble bursting before our eyes. And the people who will pay the price will be the developers who create the games we all love to play.
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