Microsoft slashed another 500 positions Tuesday, with the Xbox gaming division absorbing the heaviest blow in the company’s latest restructuring push.
The reductions land just two months after the tech giant eliminated roughly 4,800 roles, about 2.1% of its global workforce. This newest wave also touches a limited number of jobs in cloud and AI units.
Xbox has spent years expanding through blockbuster acquisitions. Now leadership faces the hard work of unwinding that growth as part of a broader effort to shed approximately 20% of the gaming workforce by the close of Microsoft’s fiscal year.
Matt Booty, an Xbox executive, confirmed in an internal memo that 268 gaming positions will disappear across Halo Studios, other first-party studios, and central management. Combined with divestitures completed since July, the company now sits roughly three-quarters through its announced restructuring plan.
The studio reorganization reaches deep into Microsoft’s gaming portfolio. Activision will absorb World’s Edge and Rare while also taking charge of the next Halo title under a newly formed team separate from Call of Duty operations. Bethesda gains oversight of Obsidian, which continues work on Grounded and a Fallout project. King will fold in Microsoft Casual Games. Meanwhile, Playground and Turn 10 merge into one studio focused on Forza and Fable.
Divestiture updates paint a mixed picture. Compulsion and Double Fine returned to independent management in August. Undead Labs now transitions under similar terms with a new publisher and plans a day-one Game Pass release for State of Decay 3.
Ninja Theory hit a harder road. Two separate sale agreements collapsed, pushing Microsoft toward consultation with employees on a potential closure. Talks regarding Arkane’s future continue through year’s end.
Severance packages from the July layoffs offered US employees up to 39 weeks of base pay, with a 60-day minimum plus additional time based on tenure.
The gaming division’s next town hall arrives October 6, where leadership plans to address progress on the reset and preview an ambitious upcoming game slate.
