A new report suggests that Microsoft is preparing to lay off up to 9,000 employees. This will be the latest of many recent layoffs taking place at Microsoft over the past year, and this new round will unfortunately impact the company’s Xbox gaming division as well.
The gaming and tech industries have experienced countless layoffs in recent years, in some cases canceling projects and shutting down entire studios. In Microsoft’s case, these layoffs have often been heavy hitters, with studios such as Alpha Dog Games, Roundhouse Studios, Tango Gameworks, and Arkane Austin shutting down in 2024. Back in 2023, Microsoft acquired Activision Blizzard for $68.7 billion, which has likely put some additional pressure on the gaming division of the company to perform well. However, the growth of Xbox Game Pass has been stagnant recently, as reports indicate that the service has already reached 35 million subscribers, a far cry from the 100 million subscribers the company was reported to want until 2030.
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Now, Variety has reported that the upcoming layoffs at Microsoft will affect around 4% of Microsoft’s total workforce of around 228,000 people. This means that up to 9,000 people could be laid off from the company, a change that will likely affect multiple studios owned by Xbox. Microsoft gaming head Phil Spencer recently addressed the layoffs, recognizing that the “changes” come at a time when the company has more players and games than ever. However, he added that “tough decisions” need to be made for Xbox to continue being successful.
Microsoft Expected to Lay Off up to 9000 Employees
Reports of Microsoft’s upcoming layoffs began surfacing last month. Unfortunately, it’s still too early to know which studios will be affected and how big the impact will be on the gaming division as a whole, but rumors are already beginning to swirl around potentially canceled projects.
Last week, an industry veteran claimed that up to 2,000 Xbox jobs could be affected in these layoffs, accounting for around 10 to 20% of the entire workforce of the gaming division. Forza Motorsport developer Turn 10 Studios was reported to be “bracing for cuts.”
This announcement follows an unfortunate trend for Microsoft. Back in May 2025, for example, Microsoft laid off around 6,000 people, marking one of the largest rounds of layoffs the company has seen since January 2023, when 10,000 workers were let go. It remains to be seen whether this will be the last round of layoffs at Microsoft anytime soon or whether the company will continue to cut jobs in the near future.
- Date Founded
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April 4, 1975
- Headquarters
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Redmond, Washington, United States
- CEO
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Satya Nadella
- Subsidiaries
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activision blizzard, Microsoft Studios, Mojang Studios, Microsoft Game Studios, Xbox Game Studios