Xbox will reportedly ‘consolidate several studios’ in new major wave of layoffs

Xbox is reportedly planning to consolidate several of its game studios in a second wave of major layoffs planned for this week.

That’s according to a new report from The Information, citing a source briefed on Microsoft’s plans, who claims that it’s planning to lay off hundreds more employees this week in a second major staff reduction.

The publication does not elaborate on how Xbox’s studio consolidations will pan out, but it suggests plans for mergers or movement within its publishing arms, Xbox Game Studios, Bethesda, Activision, and Blizzard.

In July, Microsoft enacted sweeping layoffs across the Xbox business, initially affecting 1,600 jobs, with another 1,600 planned by the end of Microsoft’s business year. Microsoft is yet to confirm the remaining roles it intends to cut, but Diablo and Warcraft maker Blizzard was notably largely unaffected by the first wave.

New CEO Asha Sharma’s plan to return Xbox to growth and “reset” its business has so far seen it cut ties with numerous Xbox-owned studios – Compulsion Games and Double Fine Productions have now returned to becoming fully independent studios, while Ninja Theory and Undead Labs have “entered terms to join new ownership”.

Xbox’s first wave of cuts included hundreds of job losses at The Elder Scrolls Online developer ZeniMax Online and around 100 cuts at Doom maker Id Software.

The cuts followed an appearance by Sharma at the Bloomberg Tech conference this summer, where she said she planned on “resetting the business,” which was “not in a healthy spot.”

They also come just a year after Microsoft’s huge 9,000 job cuts last summer, which hit the Xbox division hard. Notably, a planned Perfect Dark reboot was canceled, alongside Rare’s Everwild and other projects.

Microsoft also made significant cuts to its Xbox division in 2024 and 2023, including 1,900 staff cuts across Activision Blizzard, Bethesda, and Xbox.