Major layoffs are hitting Microsoft and Xbox today, with studios around the world affected. With a flurry of news, it can be difficult to keep on top of everything, so we’re here to help with a breakdown of the biggest developments.
First reported in June, official news of the Xbox layoffs started to emerge today, July 2, as part of Microsoft’s major cuts that will reportedly see thousands worldwide lose their positions.
Check out all the details and reports we know of so far below.
How Many People Are Affected by The Xbox Layoffs?
Official numbers have not been shared by Microsoft, which has seemingly opted to drip-feed the news rather than publish full details at once, but it’s reported that around 9000 people will lose their jobs—which works out at under 4% of Microsoft’s total workforce, currently standing at 228,000.
Insider Gaming has learned that multiple Call of Duty studios have been hit, with Raven Software, which had been working alongside Treyarch on Call of Duty: Black Ops 7, and Sledgehammer Games, which had begun work on future Call of Duty titles, are both affected. High Moon Studios, a developer assisting with Call of Duty Warzone and other projects, has also been hit.
Turn 10 Studios, behind the Forza Motorsport franchise, is one of the biggest to be hit, with the company “decimated” and nearly half of the studio has been let go. Rare has also been affected by “significant” changes, Insider Gaming has been told, but, again, no specific details on numbers have been shared.
Big names are also moving on, with ZeniMax Online Studios president Matt Firor announcing he is leaving the company at the end of the month. At Rare, game director Gregg Myles is leaving after more than 35 years with the studio.
Bloomberg reports that the Stockholm-based King division, behind popular mobile title Candy Crush, is cutting 10% of staff, around 200 jobs, while other European offices, including ZeniMax, have been informed that job cuts were happening, though no specific numbers have been shared yet.
Which Games Have Been Cancelled by Xbox With The Layoffs?
So far, the biggest game reported to be cancelled by multiple sources, including those who spoke to Insider Gaming, is Rare’s Everwild.
First announced in 2019, Everwild has reportedly had a troubled development cycle, but Phil Spencer spoke to XboxEra in February about the “progress” being made. Just a few months later, however, it seems that Everwild is on the chopping block and the Rare title has been scrapped.
ZeniMax Online Studio’s new online MMORPG has been cancelled amid the layoffs, while Perfect Dark has been cancelled, the latter coming alongside news that The Initiative has been shut down and Crystal Dynamics is no longer working with Xbox.
Games shown during the Xbox Games Showcase at Summer Games Fest are “safe,” though developers may have been hit by the layoffs. That said, it doesn’t mean an indefinite solid status, as shown by Perfect Dark’s cancellation—a title that was shown during June 2024’s showcase.
Details on further cancellations are expected as more studios become informed of changes, and we’ll keep this article up to date with the latest.
Why Are Xbox Layoffs Happening?
In an internal memo distributed by Xbox CEO Phil Spencer, the decision was said to be made to “position gaming for enduring success and allow us to focus on strategic growth areas,” despite admitting that “these changes come at a time when we have more players, games, and gaming hours than ever before.”
The changes are taking place at a time when Xbox’s “platform, hardware, and game roadmap have never looked stronger,” but that success is “based on tough decisions we’ve made previously.”
The tough decisions mentioned by Spencer are references to the other rounds of layoffs Xbox has seen so far in 2025, including at Activision Blizzard in January.
For more news, check out Nintendo’s comments on the inaccuracy of Switch 2 sales, and don’t forget to head to the Insider Gaming forum to share your thoughts on the layoffs at Xbox and Microsoft.
