Xbox Layoffs Announced: 1600 Now, 1600 More into 2028, Four Studios Leave and id Software Reportedly Gutted

Key Points:

• Microsoft is laying off approximately 3,200 Xbox employees through fiscal year 2027, with 1,600 job cuts occurring immediately, as part of broader company-wide cost-cutting measures to improve business health.
• Four internal Xbox studios, including Double Fine and Compulsion Games, will become independent again, while Ninja Theory and Undead Labs are being sold to undisclosed publishers, with commitments to complete their announced games.
• Significant layoffs have hit major Xbox-affiliated studios such as id Software, Zenimax Online Studios, and Obsidian, raising concerns about the future talent and output of these key development teams.
• The restructuring signals a strategic shift away from becoming the largest games publisher toward focusing on monetizing established franchises like Fallout, The Elder Scrolls, Call of Duty, and Minecraft, with an emphasis on traditional sales and microtransactions over Game Pass subscriptions.
• Xbox leadership changes include Helen Chiang as the first COO overseeing profit and loss across content, hardware, platform, and services, while Mojang and King now report directly to Xbox CEO Asha Sharma, highlighting their importance to the business moving forward.