Xbox Lays Off 3,200 Staffers in Major Restructure

Microsoft's Xbox video game division announced a major restructuring on Monday, its most significant in 25 years, resulting in the layoff of 3,200 employees. Xbox CEO Asha Sharma confirmed the decision, stating that the "business today is not healthy." Of the total projected layoffs, 1,600 employees will be affected immediately, with the remaining 1,600 occurring over the remainder of fiscal year 2027. This widespread reduction in workforce also includes the closure of four video game studios, though specific studio names were not immediately disclosed in the announcement. The company cited the need to streamline operations and refocus resources as the primary drivers behind these drastic measures. This move signals a significant shift in strategy for Microsoft's gaming division as it navigates a competitive and evolving industry landscape. The layoffs are expected to impact various departments across the Xbox ecosystem, from development to publishing and operations. Sharma emphasized that these decisions were difficult but necessary to ensure the long-term viability and success of the Xbox brand. The company plans to provide support for affected employees, including severance packages and outplacement services. Further details regarding the specific studios being closed and the departmental breakdown of the layoffs are anticipated to be released in the coming weeks as the restructuring process unfolds. This initiative represents a substantial change in the company's approach to its gaming business, aiming to optimize its structure for future growth and innovation within the video game market.