Xbox is reportedly planning three more waves of layoffs this month, in November, and in January 2027 as part of its planned 3,200 job cuts before the end of the fiscal year.
Earlier this year, after near-yearly layoffs since Microsoft acquired Activision Blizzard King at the end of 2023, it was announced that a further 3,200 jobs would be cut throughout FY27. This included Xbox separating from Compulsion Games, Undead Labs, and Double Fine, while Ninja Theory is at risk of closing after a deal fell through. These plans saw 1,600 laid off in July, with a further 268 laid off in September – including at Halo Studios, whose franchise has been moved to Activision
A Fortune report, published alongside an interview with Xbox CEO Asha Sharma, says that "people familiar with the plans" have said Sharma is planning layoffs for October, November and January. Obviously, for Xbox to hit its planned 3,200 job cuts by the end of March, these will need to happen, but it sounds like they will be near-monthly from here out, rather than one more big batch like the one in July.
The planned layoffs have reportedly left Xbox employees demoralized by the decision to structure them in several waves, as it effectively gives them a year's worth of worrying about whether they'll be next. Days after Gears of War E-Day story director Juan Vaca was laid off, reports emerged from The Coalition that the studio fears post-launch layoffs and that Microsoft is withholding bonus payments.
Fortune also reports that Microsoft's internal projections for the next-gen Xbox, Project Helix, indicate it could cost between $1,200 and $1,800, with the console reportedly set to launch by Christmas 2028. Alongside this is news that there's an Xbox Game Pass overhaul on the way, which could sell certain features like multiplayer and cloud gaming "à la carte."
Layoffs are unfortunately becoming more commonplace in the industry as game budgets – and CEO bonuses – increase, with Sony shutting down the likes of Bluepoint Studio, while EA laid off workers from Battlefield Studios after the game was considered a success.
Optimism that a spike in consumer spending during the COVID-19 era would persist hasn't helped either, nor does the impact of US tariffs and AI on component costs. As Sharma has noted since taking over, Xbox is no stranger to the issues facing the industry, though whether her plan to right the ship works or goes too far remains to be seen.
