Report: Xbox layoffs could be devastating, whole studios may close, Turn10 expecting cuts

Microsoft's next wave of layoffs may permanently alter the Xbox business with studio closures, and reports indicate potentially over 1,000 employees could be let go.

3

Reports say that Microsoft plans to hold a third round of layoffs in its Xbox games division, and these cuts have been described as substantial and significant. While Microsoft hasn't confirmed the layoffs, the tightly-knit games industry is anxiously buzzing behind the scenes as developers share rumors of impending demise.

3D Realms co-founder George Broussard heard that entire video game studios may be shut down by the new Xbox layoffs. Following the merger with Activision, Microsoft now has three major parent groups that oversee dozens of development studios and teams across the globe (Xbox Game Studios, ZeniMax/Bethesda, and Activision Blizzard King).

"People at virtually every studio are anxious and worried," he said on Twitter, following up with a potential count of how many people could be affected.

"Expectations are 1,000-2,000 people."

Video Game Chronicle boss Andy Robinson has also heard rumblings about the layoffs: "There's certainly a lot of negative chatter coming out of the UK Xbox studios today."

The Verge's Tom Warren says that Forza developer Turn 10 is expecting to be hit.

Microsoft has already laid off thousands of workers across the totality of its gaming sector, but the Xbox organization still employs thousands of people.

3

According to a helpful chart made by graphics whiz Klobrille, Xbox had around 21,800 workers as of October 2024.

The company has invested heavily into AI in its Windows business, and Xbox gaming is utilizing it as well for games development with the help of InWorld generative AI.

Microsoft also developed its own in-house generative AI called Muse that effectively renders gameplay in real time, automating key portions of game programming and execution.