Xbox is reportedly preparing to execute what insiders describe as the largest single layoff event in gaming history next week. The news comes from industry sources including game developer George Broussard, who claimed on X that a list of studio closures is circulating internally.
Background and context
Earlier in June, Xbox held a successful Games Showcase featuring titles like Gears of War E-Day, Clockwork Revolution, Senua, Persona 6, and Fable. However, shortly after, reports emerged that some studios, such as Ninja Theory, might be marketed for sale, suggesting the showcase served as a sales pitch to potential buyers rather than a celebration for gamers.
Xbox CEO Asha Sharma sent a memo to employees earlier this month emphasizing the need for "both optimism and realism" to "reset the business." She revealed that Xbox had a 3% accountability margin, significantly below Microsoft's targets. Bloomberg reported that Microsoft is considering closing multiple studios, and Games Beat noted that employees are meeting with unions in anticipation of layoffs.
Industry insider warnings
George Broussard wrote on X: "Jfc, I just got word of a list of Xbox studio closures (no, not posting them). If it's even close to true (and it's from inside) this will likely be the largest single layoff event in gaming history. Xbox is going to be supremely unpopular for a very long time and the devastation is going to reverberate like the meteor that took out the dinosaurs. On top of all that there will also be layoffs at the studios that remain."
The Verge's Tom Warren also commented, saying, "Next week’s Xbox layoffs are gonna be brutal."
Studios at risk
Xbox has acquired numerous studios over the past decade to bolster its first-party lineup. Studios considered at highest risk include Ninja Theory, Double Fine, Compulsion Games, Undead Labs, and possibly Rare. These studios have produced critically acclaimed but niche titles with lower sales. Larger studios like Activision Blizzard, Bethesda, and 343 Industries may also face workforce reductions.
The layoffs are not isolated to Xbox; Sony's Bungie recently announced an 80% staff reduction following the discontinuation of Destiny 2. Further updates are expected next week.
