Microsoft’s gaming division appears to be in for another turbulent week. According to a report from Eurogamer, Xbox is preparing to cut hundreds of additional jobs in the coming days as part of a wider plan to consolidate several of its game studios under a more streamlined structure.
What the Latest Report Claims
The report suggests that this second wave of layoffs could be announced as early as this week, with “several” Xbox-owned studios apparently facing consolidation. While Microsoft has not officially confirmed the details, the move would represent yet another painful restructuring for a division that has already shed thousands of jobs over the past two years.
If the numbers hold up, hundreds of developers, support staff, and possibly entire teams could be affected. Studio consolidation in these situations often means merging separate development houses into larger umbrella organizations, which can lead to duplicated roles being eliminated and some projects being quietly shelved.
A Familiar and Unwelcome Pattern
Unfortunately for Xbox employees, this is not the first round of cuts under Microsoft’s ownership. The gaming giant has repeatedly trimmed its workforce since completing its massive acquisition of Activision Blizzard.
Previous Rounds of Xbox Layoffs
In early 2024, Microsoft cut roughly 1,900 jobs across its gaming divisions shortly after the Activision Blizzard deal closed. Later that same year, another 650 positions were eliminated. That earlier wave of restructuring also saw beloved studios shut down entirely, including Tango Gameworks, the team behind Hi-Fi Rush, and Arkane Austin, known for Prey. A survival game in development at Blizzard was cancelled as well.
Why Consolidation Is on the Table
With a portfolio that now includes Xbox Game Studios, Bethesda, Activision, Blizzard, and King, Microsoft oversees one of the largest collections of development talent in the industry. Consolidating studios allows the company to reduce overhead, pool resources, and align teams around its biggest priorities, such as Game Pass growth and blockbuster franchises like Call of Duty, The Elder Scrolls, and Fallout.
What This Could Mean for Gamers
For players, the immediate impact may not be obvious, but studio consolidation often carries long-term consequences. Fewer independent teams means fewer experimental projects like Hi-Fi Rush, which was a critical darling before its studio was dissolved. It can also slow down development timelines as remaining teams absorb new responsibilities and reorganize around corporate priorities.
On the other hand, Microsoft has continued to deliver a strong lineup of first-party titles, and consolidation could theoretically allow bigger, better-resourced teams to focus on the publisher’s most ambitious projects. The coming days should reveal exactly which studios are affected and how deep the cuts will go.
An Industry-Wide Struggle
It is worth noting that Xbox is far from alone in facing these challenges. The games industry has endured tens of thousands of layoffs over the past few years, affecting publishers of every size. Rising development costs, shifting consumer habits, and post-pandemic corrections have forced nearly every major company to reassess how it operates.
Still, the optics are difficult for Microsoft, which continues to post strong revenue from its gaming division while simultaneously reducing headcount. Many in the community will be watching closely to see how leadership explains this latest round of cuts.
Stock Up on Xbox Games and Game Pass
While the corporate side of Xbox goes through growing pains, the games themselves keep coming. If you want to catch up on Xbox first-party titles or top up your library, you can find Xbox gift cards, Game Pass subscriptions, and game codes at discounted prices at TURGAME.com, your go-to store for digital game keys and gift cards worldwide.
Source: Eurogamer