Many of Xbox's subsidiaries are getting hit by the layoffs this morning, including Call of Duty studios such as Raven. Big cuts at Forza Motorsport developer Turn 10 - nearly 50% of staff, per source.
— Jason Schreier (@jasonschreier.bsky.social) 2025-07-02T16:43:19.681Z
Xbox confirms layoffs: ‘We will end or decrease work in certain areas of the business’
King and Zenimax employees have reportedly been informed of Xbox job cuts
Microsoft’s gaming division has confirmed it will be making a fresh round of layoffs, with the company starting to inform employees across its business of the cuts on Wednesday.
According to The Seattle Times, Microsoft said that as much as 4%, or roughly 9,100, of the company’s total employees, across all departments, including gaming, could be affected by Wednesday’s layoffs.
“We continue to implement organizational and workforce changes that are necessary to position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said.
In a message sent to all staff, Microsoft’s head of gaming, Phil Spencer, stated that the cuts were designed to “end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness.”
According to Bloomberg, the King division, which makes Candy Crush, is cutting 10% of its staff, or about 200 jobs. Other European offices, such as ZeniMax, have reportedly begun informing employees that job cuts are underway, with US units expected to be notified later today.
According to VGC sources, Rare has also been affected, and its long-in-development original IP Everwild is cancelled.
More layoffs reported
According to The Verge, the Xbox user research team has been hit hard by today’s layoffs, with “nearly half” the team affected. The head of Xbox family and child safety has also been laid off, it claims.
According to Aftermath, Blizzard is letting go developers behind its mobile title Warcraft Rumble, with support ending for the game.
Perfect Dark cancelled
Xbox has cancelled its Perfect Dark reboot and closed its developer, it has been confirmed.
In a statement, Xbox Game Studios’ Matt Booty said the decisions “reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape”.
More layoffs reported at Turn 10, Raven.
According to Bloomberg, Forza studio Turn 10 and Call of Duty support studio Raven have also been affected.
Unannounced MMO cancelled
According to Bloomberg, an unannounced MMO in development at Zenimax Online has been cancelled.
The following email was sent to all Microsoft Gaming employees, from head of gaming Phil Spencer:
Today we are sharing decisions that will impact colleagues across our organization. To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organizational shifts will be shared by your team leaders in the coming days.
I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger. The success we’re seeing currently is based on tough decisions we’ve made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities. We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come.
Prioritizing our opportunities is essential, but that does not lessen the significance of this moment. Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted. These decisions are not a reflection of the talent, creativity, and dedication of the people involved. Our momentum is not accidental—it is the result of years of dedicated effort from our teams.
HR is working directly with impacted employees to provide severance plan benefits (aligned with local laws), including pay, healthcare coverage, and job placement resources to support their transition. Employees whose roles were eliminated are encouraged to explore open positions across Microsoft Gaming, where their applications will be given priority review.
Thank you to everyone who has shaped our culture, our products, and our community. We will move forward with deep appreciation and respect for all who have contributed to this journey.
Microsoft has a market cap of over $3 trillion, making it one of the world’s richest companies. In its most recent quarter, the company reported nearly $30 billion in profits.
The news marks the fourth major round of layoffs at Xbox in the past 18 months.
In January 2023, the company confirmed plans to lay off approximately 10,000 employees, affecting around 4.5% of its workforce, which included staff at Bethesda and Halo developer 343 Industries.
A year later, in January 2024, it was confirmed that 1,900 staff were to be laid off across Activision Blizzard, Bethesda, and Xbox. This was followed in September 2024 with the announcement that another 650 jobs were being cut from Microsoft’s gaming division.
Earlier this year, it was reported that Microsoft had made an unspecified number of layoffs across several divisions, including employees in the Xbox maker’s security, sales, and gaming businesses.
The Xbox business is amid a period of significant change, with the company having recently adopted a multiplatform approach for its first-party games, and now heavily promoting a platform-agnostic strategy for its future products.
The recently announced Rog Xbox Ally handheld, built in conjunction with Asus, is built on Windows and can run games from multiple game stores. In a video discussing the future of Xbox, president Sarah Bond suggested this approach is the future of the business.
More to follow…
Sea of Thieves Standard (Xbox/PC)
Xbox Elite Wireless Controller Series 2 - Core (Vibrant Red)
Forza Horizon 5 Standard (Xbox/PC)
Xbox Series X Digital
Xbox Series S – 512GB
Some external links on this page are affiliate links, if you click on our affiliate links and make a purchase we might receive a commission.
