- Xbox has announced that it is undergoing a “significant restructuring”
- This will include the loss of 3,200 jobs during the financial year
- This includes 1,600 job losses today
Microsoft has announced that Xbox is to undergo the “most significant restructuring” in the brand’s history, with 1,600 jobs being cut today, for a total of 3,200 jobs that will go over the coming months, including four studios being shed.
In yet another crushing blow to the people who make the games we love, these layoffs were heavily rumored to be coming this week – the scale was unknown, but predicted to be large. It turns out that was true.
In an email sent to Xbox employees, which has now been published via Xbox Wire, Xbox CEO Asha Sharma began by saying, “After careful consideration, I have made the difficult decision to reduce our team by approximately 3,200 throughout FY27. This will include approximately 1,600 role eliminations today, and in addition, four studios will leave Xbox to the new management.”
Sharma added: “Our business today is not healthy. We operate at margins that are 3-10 times lower than comparable platform and publishing companies. We entered Gen 9 with a smaller install base and a higher cost structure. To grow, we focused on Game Pass, multi-platform and a broader portfolio of content. While these companies have created meaningful value, they were not expected to grow at the pace we expected.”
In addition to the total of 3,200 jobs going this financial year, four studios are also affected. Compulsion Games and Double Fine Productions will return to being independent studios, while Ninja Theory and Undead Labs will gain new ownership with funding to complete their upcoming games, Senua and State of maturity 3.
Arkane — a studio feared by many in the lead-up to this restructuring — “is beginning required consultation with its works council to review potential strategic options.”
In a series of moves over the past decade or so, in which Microsoft has acquired multiple studios, spent billions and billions of dollars, and made some curious decisions about Game Pass, pricing, and more — all to take the brand from third place in the console space to, well, third — this form feels like a bubble bursting before our eyes. And the people who will pay the price will be the developers who make the games we all love to play.
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