The incredible shrinking Xbox: Five studios, 3,200 employees let go
Summary
Microsoft’s Xbox division will cut 3,200 jobs and sell off five smaller game studios as part of a major restructuring. Xbox CEO Asha Sharma said these changes aim to simplify the division, reduce management layers, and focus on larger, more successful studios.Key Facts
- Xbox plans to lay off 3,200 employees, about 20% of its gaming division workforce.
- Half of the layoffs started immediately; the rest will happen by June 2027.
- Microsoft is selling five smaller Xbox-owned studios, including Compulsion Games and Double Fine Productions.
- Some studios will operate independently or be sold to other companies.
- Xbox has struggled financially with smaller studios, losing an average of 64 cents per dollar invested.
- Larger studios like Mojang (Minecraft) and King (Candy Crush) remain important and report directly to the Xbox CEO.
- The layoffs follow previous job cuts in Xbox after the Activision Blizzard purchase and other recent restructurings.
- The Xbox division had grown complex, with many layers of management; the new structure will have fewer layers to speed up decisions.
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