Daijiworld Media Network- Seattle

Seattle, Jun 25: In a significant development that could impact hundreds in the gaming industry, Microsoft is reportedly preparing for a fresh round of layoffs within its Xbox division, as part of a broader restructuring strategy. The tech giant is expected to initiate "substantial" job cuts next week, according to Bloomberg sources familiar with the matter.

If confirmed, this would mark the fourth wave of layoffs in Microsoft's gaming unit since 2024 began, intensifying concerns within the gaming workforce. The move reportedly follows internal discussions among Xbox managers, who have been alerted about the scale of the upcoming layoffs.

The layoffs are likely to affect employees across the entire Xbox ecosystem, including teams involved with game development, publishing, and hardware support. This comes despite a high-profile Xbox Games Showcase earlier this month, where Microsoft unveiled the next Call of Duty installment and introduced its first Xbox-branded handheld PC, developed in partnership with Asus.

Microsoft has been actively reshaping its gaming business since the $69 billion acquisition of Activision Blizzard. In January last year, over 1,900 jobs were cut from the Xbox and Activision Blizzard units—roughly 8% of Microsoft’s gaming workforce. Alongside that move, the company also shelved an unannounced survival game that was in development at Blizzard.

In May this year, Microsoft shut down three game studios under Bethesda, including Hi-Fi Rush creator Tango Gameworks and Redfall developer Arkane Austin, citing a renewed focus on “priority games.” Those closures also led to what were termed “significant layoffs.”

Adding to the turmoil, September 2024 saw another 650 positions slashed from the Xbox group in cost-cutting efforts aimed at streamlining operations post-merger.

Microsoft has already laid off around 6,000 employees this year, roughly 3% of its global workforce, as it ramps up investment in artificial intelligence. Until now, the Xbox unit had remained largely unaffected by these AI-related cost measures, but the upcoming job cuts suggest that even Microsoft's flagship gaming division is under pressure to optimise costs.

As Microsoft continues to pivot its business model in a rapidly evolving tech landscape, further announcements are expected in the coming weeks. The company has not issued an official statement regarding the reported layoffs at the time of publishing.