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Cover of The Cruelest Part Of Xbox's Layoffs
19 min
Jason Schreier19 min

The Cruelest Part Of Xbox's Layoffs

The recent restructuring at Xbox, characterized by a massive reduction in workforce and the divestment of five studios, has created a climate of profound instability and anxiety for remaining employees.

  • Microsoft has announced a major restructuring of its Xbox division, involving the layoff of 3,200 employees and the divestment of five game studios.
  • Beyond the primary layoffs, Xbox is cutting its vendor spend by 50%, which will result in significant job losses for contract workers who are not included in the official 3,200-person headcount.
  • Employees across Xbox, Blizzard, and ZeniMax are facing prolonged uncertainty, as a second wave of approximately 1,250 layoffs remains pending with no clear timeline for implementation.
Jason SchreierJul 2026