Update: Xbox has contacted Gamereactor to share a brief official statement:
"We continue to implement the organisational and staffing changes necessary to position the company and teams for success in a dynamic marketplace." - Microsoft spokesperson.
[Original newspiece]
It has already begun. The second major round of layoffs is beginning to surface within Microsoft, affecting many workers, especially in the gaming division. Bloomberg has begun reporting on the process, which is still being notified to employees. Speculation has put the number of laid-off workers at 9,000. To get an idea of the scale of this staff restructuring, at the beginning of 2024 there were an estimated 20,000 people working in its gaming division.
The European divisions have been the first to report layoffs. At King's Stockholm office, 200 employees have been made redundant, and a similar number have been affected at Zenimax and Bethesda's European offices. The layoffs are reportedly affecting workers across all departments, levels and seniority within the company. Rare has also reportedly been affected, effectively cancelling the development of Everwild.
There are still no exact details of the studios and departments affected, so we will be adding to this news as the figures are verified.
Microsoft Gaming CEO Phil Spencer has sent an internal email accessed by the source stating that "To position Gaming for lasting success and allow us to focus on areas of strategic growth, we will end or reduce work in certain areas of the business and follow Microsoft's lead in removing layers of management to increase agility and efficiency."
The terminated employees will receive statutory compensation, as well as health insurance and facilities to transition to a new job outside Microsoft. There will also be "priority re-evaluations" if they apply for any internal company vacancies.
This is the second major round of layoffs at Microsoft so far this year, and the fourth in the last 18 months. Counting the 6,000 workers laid off in May, mainly from its engineering division, a total of 15,000 people have lost their jobs at Microsoft in 2025 alone. And given the current rate of job destruction and the climate of job instability in the big tech companies, we wouldn't be surprised if it wasn't the last.