Microsoft's job cuts go beyond Xbox, with 2.1% of its global workforce affected

Q: How will the transition of Compulsion Games and Double Fine to independence affect ongoing updates or support for their existing games?

Compulsion Games and Double Fine becoming independent studios means their IP and games remain intact and they will move to new ownership or independent status, which implies ongoing updates and support for existing games should continue under the studios' new independent arrangements. The primary article notes Xbox is transitioning studios to new ownership or independence with their various IP and games intact, so support and in-development work are preserved.

Q: What happens to in-development titles like Senua and State of Decay 3 after Ninja Theory and Undead Labs move to new ownership?

They will transition to the new owners with funding intact for those projects. Specifically, Ninja Theory and Undead Labs are moving to new ownership that includes funding for their in-development titles Senua and State of Decay 3.

Q: Are there details on the voluntary retirement programs and severance packages offered to affected Microsoft employees?

The primary article says Microsoft is offering voluntary retirement programs and taking steps to redeploy employees and transition Xbox studios to new ownership, but it gives no specific details about the voluntary retirement programs or severance packages. Related coverage may discuss the retirement program (see Related 1: "Xbox employees offered Microsoft's first-ever retirement program amid studio closures") but no specifics are provided in the primary article.

Microsoft is set to cut 4,800 jobs, which is roughly 2.1% of the company's entire global workforce, with the majority happening in the Xbox division.

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Kosta Andreadis

Senior Editor

Published Jul 7, 2026 5:31 AM CDT

1-minute read time

TL;DR: Microsoft will cut 4,800 jobs, about 2.1% of its global workforce, with 3,200 cuts in Xbox and commercial divisions. The restructuring aims for long-term success after the Activision Blizzard acquisition. Some Xbox studios will become independent or shift ownership, preserving ongoing projects and IP.

Voice: Kosta AndreadisSpeed

0:00 / 2:24

One of the biggest PC and gaming-related stories of the past week has been the rumors that Microsoft was set to close multiple Xbox studios, along with other gaming-related job losses, as part of its big 'Xbox reset.' This was made official today, with the company confirming that its Xbox team would be "reduced" by 3,200 people through financial year 2027, with 1,600 of those "eliminated" today.

Microsoft's job cuts go beyond Xbox, with 2.1% of its global workforce affected 1

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However, these job cuts are part of a broader shift at Microsoft, with Amy Coleman, EVP and Chief People Officer at the company, confirming that this "company transformation" will result in 4,800 job cuts. This represents 2.1% of Microsoft's global workforce, with Amy Coleman stating that these jobs are "not being replaced by AI" even though "AI is changing how work gets done."

With 3,200 of the 4,800 job cuts being related to Xbox and Microsoft's commercial business, the announcement says that it's all about "restructuring to position the business for long-term success." In other words, corporate speak for a division that grew exponentially with the recent $70 billion Activision Blizzard acquisition, which it has seemingly failed to capitalize on through mismanagement and a confusing strategy.

Read more: Xbox employees offered Microsoft's first-ever retirement program amid studio closures
Read more: Zenimax Online Studios leaders, including studio head, exiting as part of Xbox cuts
Read more: Report: Xbox lays off nearly half of id Software, Doom and Quake still priorities

Frequently Asked Questions

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Question #1

How will the transition of Compulsion Games and Double Fine to independence affect ongoing updates or support for their existing games?

Question #2

What happens to in-development titles like Senua and State of Decay 3 after Ninja Theory and Undead Labs move to new ownership?

Question #3

Are there details on the voluntary retirement programs and severance packages offered to affected Microsoft employees?

Have a question about this content not listed here? Ask below and TweakBot will answer it.

On the plus side, Microsoft is reportedly taking steps to minimize the impact of these changes. This includes redeploying employees to new roles, offering voluntary retirement programs, and, in the case of Xbox, transitioning studios to new ownership, independent or third-party, with their various IP and games intact. On that note, Xbox studios Compulsion Games and Double Fine Productions are becoming independent studios, with Ninja Theory and Undead Labs transitioning to new ownership that includes funding for currently in-development titles Senua and State of Decay 3.