Xbox cutting hundreds of jobs, consolidating studios
Second wave of Xbox layoffs in two years hits studios and consolidates teams
Microsoft is cutting hundreds of Xbox employees this week and consolidating several game studios, according to The Information. The layoffs mark the second major round of staff reductions at Xbox in under two years.
The studio consolidations will fold smaller teams into larger ones. Which studios and how many roles are affected hasn't been disclosed. Microsoft acquired roughly 20 studios between 2018 and 2023 — Bethesda, Activision Blizzard, and a string of smaller shops — and has struggled to integrate them efficiently.
This is bad for the teams. It's also worrying if you've been waiting on games from those smaller studios. Consolidation usually means project cancellations and longer dev cycles. The first wave of Xbox layoffs (1,900 people in January 2024, mostly from Activision) hit support and QA hard. This round could cut into actual development capacity.
If you're on PC and your backlog is mostly Game Pass titles, check what's still coming in 2026. The pipeline matters more than the org chart, but fewer studios shipping means fewer Day One drops.