New Delhi: Microsoft has begun a major round of layoffs that is expected to impact close to 9,000 employees globally. This accounts for roughly 4% of its workforce. The layoffs, confirmed on July 2, have touched several parts of the company, but some of the most visible changes are happening within its gaming division, Xbox. From cancelled titles to entire studios shutting down, the impact is already being felt across the gaming community.
In an internal memo, Microsoft Gaming CEO Phil Spencer admitted that these were hard choices, but said they were necessary for the long-term health of Xbox. He claimed the changes would make the company more agile and focused. “We will end or decrease work in certain areas of the business,” Spencer wrote. “We must make choices now for continued success in future years.”
Xbox studios hit hard by layoffs
One of the studios hit the hardest appears to be Turn 10 Studios, known for the Forza Motorsport series. Reports suggest that nearly half of the staff at Turn 10 have been let go, although the exact figure is still unclear. Their most recent release was 2023’s Forza Motorsport for PC and Xbox Series X|S.
British game developer Rare also faced layoffs, and the damage didn’t stop there. The studio’s upcoming title Everwild, which had been in the works since 2019, has now been cancelled. Developers told VGC that the game went through multiple reboots but never found the right direction.
Support studios also affected
Longtime Call of Duty collaborators High Moon Studios and Sledgehammer Games have not been spared either. According to reports from Charlie Intel and Insider Gaming, both studios are seeing staffing reductions. Raven Software, which recently co-developed Black Ops 6 and is said to be working on Black Ops 7, has also been affected, though the numbers are still unclear.
Blizzard scaling back Warcraft Rumble
Over at Blizzard, the free-to-play mobile title Warcraft Rumble is also taking a hit. While bug fixes and system maintenance will continue, no new content will be added. Aftermath reports say up to 100 Blizzard employees could be affected, with some being reassigned and others let go.
Phil Spencer tried to balance the news by pointing out that Xbox is performing well, with strong player numbers, more games, and record engagement. Still, many in the industry are questioning why such deep cuts are happening during a period of apparent success.
“Our platform, hardware, and game roadmap have never looked stronger,” Spencer said, while adding that these tough steps were part of a strategy to focus on areas with the most potential.
Despite the upbeat tone from leadership, for many developers now out of a job, this moment feels anything but promising. For players, it raises concerns about the future of their favourite studios and games.