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Microsoft’s Xbox division reportedly plans hundreds of layoffs this week as part of another major gaming restructuring. The Information reported the cuts on September 21, citing a person briefed on the plans. The changes could also consolidate several game studios across Microsoft’s gaming organization.
Xbox reportedly wants better profit margins by reducing costs and concentrating development around major franchises. The affected studios and final job count remain unknown, while Microsoft did not confirm the report.
The reported Xbox layoffs would mark the second major staff reduction this year after July’s restructuring. Xbox eliminated 1,600 roles in July and planned another 1,600 reductions through fiscal 2027.
The latest move could merge studios or shift teams across Xbox Game Studios, Bethesda, Activision, and Blizzard. The Information does not identify the studios involved, leaving the scope of the consolidation unclear for now.
Xbox increasingly focused its development strategy on established franchises during the restructuring. Major properties such as Elder Scrolls and Fallout could receive greater resources under the changing strategy. Smaller acquired studios may receive less investment as Microsoft seeks a leaner development structure.
The studio changes could also reshape how Xbox manages creative teams across its broader publishing network. Reports have not linked specific game cancellations to the latest restructuring, keeping project impacts uncertain.
Separate reporting added pressure around Blizzard, which largely avoided July’s initial Xbox cuts. Bloomberg reporter Jason Schreier said Blizzard layoffs were ‘imminent’ during the latest 8-4 Play podcast episode.
Microsoft did not confirm whether Blizzard will face cuts in the reported Xbox restructuring. The company also did not confirm any studio mergers or the possible movement of teams between publishing groups.
The latest reports point toward another major shift in Microsoft’s gaming operations. Xbox now appears focused on fewer development groups while directing resources toward established game franchises.
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