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Microsoft Laying Off as Many as 9,000 Employees, includes Layoffs at Xbox Division [Updating] - News
by William D'Angelo , posted on 02 July 2025 / 6,926 Views
Microsoft following reports has begun another round of layoffs as the Seattle Times reports that around four percent or as many as 9,100 employees will be let go.
The Xbox division has been hit hard with layoffs, however, the exact number of people laid off are unknown at this time.
A report from Bloomberg reveals Candy Crush developer King is laying off about 200 employees, which is 10 percent of its staff. ZeniMax in Europe has begun informing employees of layoffs, according to people who asked not to be identified as they are not allowed to speak to the press.
Sources told Windows Central the marketing team at ZeniMax in London, UK and Rockville, Maryland in the US have been hit with layoffs.
Bloomberg's Jason Schreier is now reporting Xbox has cancelled Rare's Everwild, which was announced in 2019. Development on the game was reportedly "a real mess" in January 2022.
Schreier is also reporting the ZeniMax Online Studios MMOPRPG with the codename Blackbird has been cancelled. The game has been in development since 2018.
Call of Duty developers Sledgehammer Games and Raven Software have also been hit with layoffs, according to Insider Gaming. Producer at Raven Software Josh Kohn has confirmed the studio has been with layoffs on LinkedIn. High Moon Studios, support studio on Call of Duty Warzone and other projects, hit with layoffs as well.
Blizzard Entertainment has also been hit with layoffs. Reports claim people working on Warcraft Rumble, the editorial team, quality assurance, customer service, and marketing have been let go.
Blizzard president Johanna Faries in an email sent to employees obtained by Aftermath stated development on Warcraft Rumble is being "scaled down" to a live ops-only phase. Several team members have moved to other roles within Blizzard, however, several have been let go. Sources claim as many as 100 on the Warcraft Rumble team have been laid off.
"As part of these changes, we made the difficult decision to shift to a scaled down, live ops-only phase of development for Warcraft Rumble, similar to our current approach with games like StarCraft II and Heroes of the Storm," said Faries.
Faries added, "Organizational changes like this can be difficult to navigate and our ability to adapt, stay focused, and weather storms is a testament to the strength and resilience of our teams. I want to recognize the significant and meaningful progress we are making on many fronts. Today's news does not diminish the hard work and dedication of talented individuals, nor does it take away from the collective brilliance of so many. Together, we will continue to build towards a bright and creatively ambitious future for players the world over."
It has been reported by Schreier many of Xbox's subsidiaries are getting it with layoffs. A source claims nearly 50 percent of Forza Motorsport developer Turn 10 have been let go.
Xbox Games Studio head Matt Booty in an email sent to employees obtained by Windows Central has confirmed Perfect Dark and Everwild have been cancelled and developer The Initiative is being shut down. Several unannounced games have also been cancelled.
A report claims South of Midnight developer Compulsion Games has also been hit with at least some layoffs. State of Decay 3 developer Undead Labs has been hit with layoffs.
The quality assurance team at Minecraft developer Mojang has reportedly been hit with layoffs.
A source has told Variety that every game that was shown during the Xbox Games Showcase in June is safe and will continue development.
A new report states nearly half of the Xbox user research team has been laid off. This is a team that focuses on quality across Xbox games, the platform, and developer tools. The head of Xbox family and child safety has also been laid off.
Video game reporter Rebs Gaming is reporting that at least five people at Halo Studios have been let go. These layoffs were confirmed by employees on LinkedIn.
Microsoft had over 228,000 employees as of June 2024, while the entire Xbox division had around 20,000 employees as of January 2024.
Read a memo from Microsoft Gaming CEO Phil Spencer sent to employees below:
Today we are sharing decisions that will impact colleagues across our organization. To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organizational shifts will be shared by your team leaders in the coming days.
I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger. The success we’re seeing currently is based on tough decisions we’ve made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities. We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come.
Prioritizing our opportunities is essential, but that does not lessen the significance of this moment. Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted. These decisions are not a reflection of the talent, creativity, and dedication of the people involved. Our momentum is not accidental—it is the result of years of dedicated effort from our teams.
HR is working directly with impacted employees to provide severance plan benefits (aligned with local laws), including pay, healthcare coverage, and job placement resources to support their transition. Employees whose roles were eliminated are encouraged to explore open positions across Microsoft Gaming, where their applications will be given priority review.
Thank you to everyone who has shaped our culture, our products, and our community. We will move forward with deep appreciation and respect for all who have contributed to this journey.
Phil
Read the email from Xbox Games Studio head Matt Booty below:
Following Phil’s note, I want to share more about the changes to the Studios business units.
We have made the decision to stop development of Perfect Dark and Everwild as well as wind down several unannounced projects across our portfolio. As part of this, we are closing one of our studios, The Initiative. These decisions, along with other changes across our teams, reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape. We did not make these choices lightly, as each project and team represent years of effort, imagination, and commitment.
Our overall portfolio strategy is unchanged: build games that excite our players, continue to grow our biggest franchises, and create new stories, worlds, and characters. We have more than 40 projects in active development, continued momentum on titles shipping this fall, and a strong slate headed into 2026.
For those directly affected, we are working closely with HR and studio leadership to provide support, including severance, career transition assistance, and where possible, opportunities to explore roles on other teams.
To everyone across our studios: thank you. Your creativity and resilience continue to define who we are. I believe in the strength of our teams and the direction we're taking on the path ahead.
Update 1: Added the report Rare's Everwild has been cancelled.
Update 2: Added the report ZeniMax Online Studios MMORPG, codename Blackbird, has been cancelled.
Update 3: Added report claiming Call of Duty developers Sledgehammer Games and Raven Software hit with layoffs.
Update 4: Added reported saying nearly 50% of Turn 10 has been laid off.
Update 5: Xbox Games Studio head Matt Booty email reveal Everwild and Perfect Dark have been cancelled, and developer The Initiative have been shut down.
Update 6: High Moon Studios, support studio on Call of Duty Warzone and other projects, hit with layoffs as well.
Update 7: South of Midnight developer Compulsion Games reportedly hit with layoffs.
Update 8: State of Decay 3 developer Undead Labs hit with layoffs.
Update 9: Blizzard Entertainment hit with layoffs.
Update 10: Quality assurance team at Mojang reportedly hit with layoffs.
Update 11: Nearly half of Xbox user research team has been let go.
Update 12: Warcraft Rumble scaled down leading to reports claiming up to 100 have been laid off and other moved to other roles within Blizzard.
Update 13: Halo Studios has laid off at least five employees.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can follow the author on Bluesky.
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Phil and all the other overlords keep their jobs for incompetence though.
The first job AI should replace is "CEO".
It is funny that you say that; because a rumour suggests Nadella wants to spend $88 billion on AI development. Meta has been poaching a lot of staff within this area recently; offering engineers a $100 million to jump ship.
Waiting for Azzanation to tell us why this is actually great news for Xbox.
A common reply is "people have been saying Xbox is dead for years, so this is nothing new"
Tbh Xbox has sunk so much that any news is considered "good" because there's no where else lower to go at this point to be considered "bad news".
Odd thing to bring me into this. Could you link or quote me where I ever said Layoffs are a great thing?
Feels like you misunderstood when i said Layoffs are a reality of life, it happens year on year with majority of companies but people continue to be shocked by the news and worse, use it to fuel console wars.
Can you point out where i said "layoffs are great news" as you stated in your post.
I cannot see it anywhere
You dismissed layoffs as a non-issue. That's what you actually did.
Layoffs happen every year, everyday, its part of the real world. Is it sad, yes, do I support the decisions made? I dont know. I work for a massive corporation and every year we let go the bottom 3% and they are normally the underpreforming ones etc.
Layoffs are not a great thing without reasons, sometimes companies need to clean out and rehire., sometimes its greed, sometimes its unlawful.
But i am not going to cry on the internet about something that has been happening since the beginning of man.
Nintendo doesn't do it and execs reduce salaries to avoid layoffs. 98 percent employee retention rate. They figured it out.
Nintendo are a fraction of the size of MS and are incredibly successful in the gaming industry.
I've got a video up on YouTube going over the layoffs and what studios have so far been confirmed to have been hit.
https://www.youtube.com/watch?v=GGqyWlzux0I
I'm updating the article as more news on what studios have been hit and what games have been cancelled.
- Rare's Everwild and ZeniMax Online Studios MMORPG, codename Blackbird, have been cancelled.
- Call of Duty developers Sledgehammer Games and Raven Software hit with layoffs.
- Report claims nearly 50% of Forza Motorsport developer Turn 10 has been laid off.
- Many Xbox studios hit with at least some layoffs.
- Xbox Games Studio head Matt Booty email reveal Everwild and Perfect Dark have been cancelled, and developer The Initiative have been shut down.
- High Moon Studios, support developer, hit with layoffs.
- South of Midnight developer Compulsion Games and State of Decay 3 developer Undead Labs hit with layoffs. State of Decay 3 reportedly fine and still in development.
- Blizzard Entertainment hit with layoffs. Up to 100 working on Warcraft Rumble laid off as game is scaled down.
- Quality assurance team at Mojang reportedly hit with layoffs.
- Halo Studios has laid off at least five employees.
- Every game at the Xbox Showcase in June is reportedly safe and will continue development.
Why in the everloving fuck would you lay off people at Turn 10? Forza has been killing it forever now.
Forza Motorsport performed poorly. You are likely thinking of Playground that develops Forza Horizon.
Forza Horizon by playground is indeed killing It. Forza Motorsport sport, on the other hand, is not doing good at all.
Cutting staff of their premier racing sim isn't going to help the situation but this said why do we think it isn't doing to hot? Should they have named it Forza Motorsport 8? Has the appeal of racing sims gone down? Or is it the fact that Horizon series is just that much better that is what people expect from Forza?
We haven't had the new Forza game release to measure it's failure
171 billion profit last year was not enough
People need to stop investing in the Xbox ecosystem. The more successful they are, the more people they’ll lay off.
The multiplatform efforts have barely begun. Forza Horizon 5 has been on PS5 for barely a few months and sold really well for a 4 year old game. Any of these titles are surely just subsidising GP and day one purchases and other revenue.
Not saying you are wrong but feels to early to judge.
Yeah, when we talk multiplatform for MS, I don't think of PC, they are PC. They've been releasing on PC for many many years, with some of their well known franchises being PC only games or ideally played on PC/Windows.
However the drive for more multiplatform, like releasing of Sea of Thieves and other games just last year on Playstation, is something that would have been seen as mad less than 3 year ago.
Any discussion of Politics, Religion, or israel is too intense of a subject for this article thread. Go to the forums for that.
Satya Nadella.... Phil Spencer... and everyone around them needs to be fired
I'm done with the incompetence of Microsoft and all of their brands
The thing is that Microsoft and Xbox keeps making more money than ever. with such configuration, seeing those guys fired is pretty unlikely for now.
If I hadn't recently moved away from Windows to Linux out of necessity , I would've now.
Words can't really describe this... Horrifying to say the least.
Power your Dreams!
Ok but can you fire the heads of Microsoft/Xbox? Because if theyre not making enough profit, kinda hard to justify the same poor leadership sticking around
Always thought that Nadella wanted to kill off the Xbox brand entirely, but this is just blatent. Almost every single decision MS and Xbox have made lately, is a bad one. You could argue whether going multiplat is ultimately good or bad for them, and the brand.. but really since Xbox hardware isn't selling, it makes sense. Idk how they expect to sell hardware in the first place, when this year they HIKED xbox prices, for a console the mainstream was pretty much ignoring. It seems like all they care about is the number of gamepass subscribers they have. These layoffs and their nature call into question.. What happens if the next Halo doesn't do as well as expected, same thing with Gears? The Turn 10 layoffs makes you think.. Will we get to a stage where it's MS Gamepass, and all that's on their is third party games? It feels like no one is safe, i doubt i even need to bring up Tango gameworks to give weight to that point. Throughout the life of the Xbox brand, it feels like they get themselves in a pretty good position, with the makings of something great... then completely squander their opprtunity to make a place for themselves in the market. Xbox 360 no doubt was something great, then they waste all of that with the Xbox one. Somehow, they luck out.. Release the One X and things are starting to seem good again, then during this generation they make all the worst decisions they could possibly make, regardless of the fact that the hardware is acutually GOOD. I hope everyone affected by the layoffs can find other work promptly. This is complete bs.
They should close Halo Studios as well
9000 where the majority is amoung the xbox division... thats alot of people gone. How will this effect things going forwards?
Wow, that's insane, rumor said 1 to 2K, but nearly 10k??? Damn...
9k layoffs, damn. How much of a percentage of the total employees of MS' gaming enterprises in general does this represent?
The 9K is Microsoft as a whole not just the gaming business. No idea how many of those are at gaming.
I guess, I just want to know how much of MS' gaming business has been impacted by this.
Everwild and Perfect dark being canned is absolutely sad to see, they were two of the biggest games I was looking forwards to playing.
But what is truly surprising is that even cash-cows that are raking it in have been hit. (MInecraft)
This is a bloodbath
I was actually looking forward to perfect dark
Let all of the original xbox360 team come back up and look how xbox will be on track again.
Imagine cancelling the most hyped exclusive lol. This is the one game Xbox and PlayStation fans want
Damn, I know Perfect Dark had development issues but this was 1 game i was looking forward to.
Perfect Dark and Everwild I was genuinely looking forwards to.
Rare has supported Sea of Thieves really well... And Perfect Dark could have been a massive franchise if it wasn't mishandled.
Hopefully they don't touch Fable.
Essay Pro