plowunited.net – Microsoft is preparing to cut jobs in its Xbox division next week as part of a broader company restructuring. Sources say the layoffs will be substantial and affect multiple teams across Xbox’s gaming division. This will be the first round of Xbox layoffs in 2025 but the fourth since early 2024. The company aims to reduce costs and realign resources after its large acquisition of Activision Blizzard. The layoffs will impact employees across various departments within Xbox, reflecting ongoing changes in the gaming industry and Microsoft’s strategic priorities.
Background on Previous Xbox Layoffs
Microsoft’s Xbox division faced significant layoffs throughout 2024. In January 2024, the company cut over 1,900 jobs, about eight percent of its gaming staff. These cuts included employees at the recently acquired Activision Blizzard unit. The layoffs also followed the cancellation of an unannounced survival game at Blizzard.
Later, in May 2024, Microsoft closed three Bethesda-owned studios, including Tango Gameworks and Arkane Austin, leading to further job losses. In September, 650 Xbox jobs were cut to control costs following the Activision deal. These layoffs reflected Microsoft’s efforts to consolidate and focus on high-priority projects within Xbox’s portfolio.
Recent Workforce Changes Across Microsoft
Beyond Xbox, Microsoft has reduced its overall workforce by about 6,000 jobs in 2025, approximately three percent of its global staff. These cuts mainly targeted non-gaming divisions due to increased spending on AI technologies and operational adjustments. Xbox was not affected by the broader 2025 layoffs until now. The upcoming layoffs at Xbox indicate a renewed focus on cost management in the gaming division. Microsoft continues to balance investment in innovation with financial discipline as market conditions evolve.
Xbox’s New Initiatives Amid Layoffs
Despite the job cuts, Xbox recently showcased several new projects. The division revealed the next Call of Duty title and announced the first Xbox-branded handheld gaming PC in collaboration with Asus. These launches highlight Microsoft’s commitment to expanding its gaming ecosystem and reaching new audiences. The layoffs do not diminish Xbox’s long-term goals but signal a shift toward efficiency and streamlined operations. Microsoft aims to support key franchises and technology innovation while managing costs.
Outlook for Xbox and the Gaming Industry
Microsoft’s planned layoffs reflect broader trends in the gaming and tech sectors where companies adjust staffing to match evolving business needs. The cuts will challenge Xbox teams but also create opportunities for refocused growth.
Microsoft’s continued investment in cloud gaming, AI, and hardware innovation positions Xbox to compete effectively despite the restructuring. The gaming community and industry analysts will watch closely how these layoffs affect game development and future releases. Overall, Microsoft’s layoffs in Xbox mark a strategic pivot toward sustainability and competitiveness in a fast-changing market. The company aims to maintain its leadership in gaming while optimizing resources for the future.
