The next batch of Xbox layoffs could be the worst so far, with an industry insider predicting studio closures as well.
It’s been reported for some time that Microsoft is planning another major wave of layoffs throughout the company and a couple of days ago it was claimed that the Xbox division would be amongst those impacted.
These layoffs will supposedly happen by the end of June, but previously no exact figures were given for how many people would be affected.
If a new rumour is to be believed though, Xbox could lose upwards of 2,000 employees – approximately 10% of its entire workforce.
The prediction comes from respected game designer George Broussard, who previously co-founded Apogee Software, better known nowadays as 3D Realms, and was one of the creators behind the Duke Nukem games.
In a Bluesky post from earlier this morning, Broussard claims to have heard ‘internal developer stuff’ from within Microsoft, with anywhere from 1,000 to 2,000 people expected to be let go.
Not only that, but there are concerns that entire studios could be shut down, which is sadly all too believable. After all, Microsoft killed no less than three studios last year, including Tango Gameworks, despite its last game, Hi-Fi Rush, winning several awards and purportedly being a success in the eyes of Microsoft.
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Although Broussard estimates that Xbox has roughly 10,000 employees, our research puts the number at about 19,450, once you take into account subsidiaries like Bethesda and Activision Blizzard.
Regardless, the worst case scenario of Microsoft letting go 2,000 employees would take a hefty chunk out of the Xbox workforce, putting the total post-pandemic losses at well over 4,000.
That includes 650 employees that were let go last September, and almost 2,000 job cuts at the beginning of 2024.
So far, more than 2,500 Xbox employees have been let go since Microsoft finalised its $75 billion purchase of Activision Blizzard, which remains the most expensive acquisition in the history of the games industry.
Even if the actual numbers are at the lower end of Broussard’s estimate, the next round of layoffs will bring the total job losses at Xbox to more than 3,500.
While some cuts were inevitable, to eliminate duplicate jobs post-acquisition, the sheer volume of layoffs is well above the normal and exacerbated by both post-pandemic bloat and Microsoft’s enthusiasm for AI.
Microsoft may also be looking to cut costs due to the Activision Blizzard purchase not being as lucrative as hoped, with the addition of Call Of Duty games on Xbox Game Pass barely improving subscriber numbers and the series as a whole still bleeding players.
This combined with dwindling hardware sales is no doubt what made Microsoft decide to port Xbox exclusives to PlayStation and Nintendo platforms, in a bid to bump up its revenue.
Yet despite its games reaching new audiences and performing particularly well on PlayStation, it doesn’t appear to be enough for Microsoft, not if it’s considering killing more studios to help save money.
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