Microsoft Layoffs: Microsoft is in the news again and this time the reason is the big layoffs in its gaming division Xbox. According to reports, Microsoft is going to start large-scale Microsoft layoffs in the Xbox division from next week. In this, the jobs of one thousand to two thousand employees are at risk. Not only this, there is also a possibility of closure of some studios. So let’s understand this news a little more deeply.
What is the whole matter of Microsoft Layoffs
The Xbox division is going to face major layoffs for the fourth time in the last one and a half years. According to a new report by Bloomberg, Microsoft can carry out these layoffs in early July after the end of its fiscal year i.e. June 2025. These Microsoft layoffs will affect not only Xbox employees but also sales and distribution teams, especially in Central Europe. Some reports say that Xbox operations in Central Europe may be completely or partially closed.
Duke Nukem creator George Broussard wrote on Bluesky that employees in almost every Xbox studio are upset with this news. According to him, one thousand to two thousand employees may be laid off, which is ten to twenty percent of the total ten thousand employees of the Xbox division. There are also reports of some studios being closed, which has created an atmosphere of fear and uncertainty among the developers.
The Xbox division has already faced layoffs several times in the last eighteen months. In January 2024, one thousand nine hundred employees were fired, most of whom were employees of Activision Blizzard. Microsoft bought Activision Blizzard in 2023 for seventy-nine billion dollars. After this, studios like Arkane Austin and Tango Gameworks were closed in May 2024, although Tango Gameworks was later bought by Krafton. In September 2024 also, six hundred and fifty employees were laid off.
What is the reason behind Microsoft Layoffs
Now the question is why is Microsoft repeatedly doing such big layoffs. The biggest reason for this is the $79 billion deal to buy Activision Blizzard in 2023, which is the biggest acquisition in the gaming industry so far. After this deal, there is a lot of pressure on Microsoft to increase profits. Hardware sales of Xbox Series X and S have seen a decline of up to thirty percent. Apart from this, the growth of Xbox Game Pass, which is a key part of Microsoft gaming strategy, is also slowing down now.
George Broussard said that the subscription service of Xbox Game Pass is no longer growing as fast as before. Also, Microsoft has increased the prices of Xbox hardware, due to which the price of Xbox Series S has now become more than PS5. In such a situation, the company is trying to reorganize its strategy and for this it is choosing layoffs and closing studios as a cost cutting.
Microsoft CEO Satya Nadella had said that these layoffs are not related to the performance of the employees but to the strategic reorganization of the company. But the news of such a large number of layoffs and the closure of studios is raising a big question in the gaming industry whether the future of Xbox is safe.
What will be the next step of Xbox and Microsoft
These Microsoft layoffs will not only affect the employees but the entire gaming industry. Xbox big franchises like Forza Horizon 5 and Gears of War Reloaded are now also being released on PS5, which is Microsoft new strategy to increase income. But Xbox sales have already decreased a lot in markets like Europe. For example, only twelve thousand units of Xbox Series X and S were sold in Spain from January to June 2025.
Apart from this, Microsoft is planning to restructure Xbox distribution in Central Europe, under which Xbox operations may be completely closed in some regions. All this is happening when the gaming industry has faced more than sixty-one thousand layoffs in 2025.
This is a very difficult time for the employees. George Broussard said that the gaming industry is currently undergoing contraction, meaning that finding new jobs is no longer as easy as before. For employees who lose their jobs, finding a new job in the same location will be a big challenge.
This wave of Microsoft layoffs is another big blow to the Xbox division. More than two and a half thousand employees have been fired in the last one and a half years and now there are reports of layoffs of one thousand to two thousand more employees. The possibility of studio closures has created fear among developers. Microsoft strategy may be to increase profits, but its impact will be on employees and the gaming community for a long time.
What do you think? Will Xbox be able to get out of this difficult phase? Do share your opinion in the comments.