In the middle of a record year for Xbox in terms of activity, Microsoft has confirmed a new wave of layoffs hitting its gaming teams, with devastating consequences.
It is a real thunderclap, which resonated on July 2, 2025 in the video game industry, when Phil Spencer, boss of Xbox, announced a large restructuring campaign in the Gaming sector of Microsoft. Paradox as cruel as it is typical of industry, it is then that the Xbox division has never been so a hit (thank you Call of Duty) that the Redmond firm has chosen to cut into its workforce like never before. A brutal bleeding, which affects all the stages of his video game empire, from mobile to triple A, from live the narrative solo game.
Several major projects are purely and simply canceled, whole studios put in the carpet, and hundreds of positions removed in European and American territories. A dynamic of strategic refocusing already initiated in recent months, and which is accelerating spectacularly in the name of economic agility and the optimization of yield. Concretely, Several thousands of layoffs have been announcedcounterpouss of the buyout of Activision-Blizzard by Microsoft in 2023.
Several major games canceled at Xbox
Direct consequence of this new wave of layoffs, Microsoft has discreetly passed to the guillotine several of his most anticipated projects. Among them, the reboot of Perfect Dark, Supposed to symbolize the revival of Xbox historic licenses, was purely and simply abandoned.
The project, announced with great fanfare by the studio The Initiative in 2021, will never see the light of day, after years of chaotic production and successive reshuffles. Same spell for Everwildthe new rare license (author of GoldenEye 64), which will never have exceeded the stage of a fuzzy concept, despite 10 years of development.
Another collateral victim, Blackbirda MMORPG developed internally by Zenimax Online (The Elder Scrolls Online), was canceled even before its formalization. The project was to become a new license intended to boost the Game Pass, but will not have survived the strategic reorganization of the group, while it was in the making since 2018 …
We also learned that the next FPS of John Romero (creator of Doom), which was to be published by Microsoft, is now without publisher, and therefore in standby. Finally, even games already released are not spared: Warcraft Rumble, Blizzard’s mobile spin-off, will soon stop receiving updates, proof that Microsoft also size in the post-launch service of titles deemed unprofitable.
And these are only Games announced officially, for which the studios informed the public of the killing of their projects. But according to some sources, several other titles have been canceled. The exact number of deleted games remains unknown.
Holders studios
Behind these cascading cancellations, it is a substantial part of the Xbox ecosystem that was put down. The damage is particularly visible on the side of King (the golden egg hen Candy Crush)the mobile branch of Activision-Blizzard, which has lost around 200 employees, a severe cup in its European workforce. Blizzard was not spared either, in particular on its insurance and marketing insurance departments, while Zenimax Europe (the structure of Bethesda on the old continent) faced massive discounts.
On the emblematic studios side, Raven Software, known for his work on Call of Dutysaw his teams reduced, while Halo Studios, Compulsion Games (South of Midnight) and Undead Labs (behind State of Decay) have also undergone frank cuts. The Initiative, the studio mounted from scratch to relaunch Perfect Darkis now closed, symbolically buried the dream of reviving legend Johanna Dark.
Same turn 10 studios, however pillar of the Xbox Studios, and responsible for the franchise Forza (working hand in hand with playground games for Come on Horizon), has seen half of its workforce thanked, a direct consequence of the mixed reception of the last Forza Motorsport.
Except that Xbox has never had so many players
What makes this restructuring even more cynical is that it intervenes while theA Xbox division has reached historical heights in terms of activity. Phil Spencer recognized it in an internal memo published by Videogames Chronicles : Never so many players have attended the Xbox ecosystem. A cruel irony, proof of the lag between brand performance and owner’s strategy.
« I recognize that these changes arise at a time when we have more players, games and hours played than ever before. Our platform, equipment and our roadmap for games have never been so solid. The success we are currently experiencing is based on difficult decisions that we have taken previously. »
The Game Pass continues to supply a solid user base, and titles like Devil IV, Sea of Thieves et Call of Duty : Warzone ensure a sustained activity, even outside the launch of large exclusives. However, this vitality is subject to a cold economic logic: more players, that’s good, but with fewer developers to design and maintain them is better.
Microsoft: 15,000 licensees in six months
The current voting wave would concern nearly 9,000 employees (note that you do not know exactly how many Microsoft Gaming employees are concerned exactly). This follows another massive cart of 6,000 job cuts announced last May. Since the beginning of 2025, Microsoft has therefore removed nearly 15,000 jobs.
According to data from Microsoft annual reports, the company had 228,000 employees on board in June 2024. It is therefore almost 4% of the total workforce that is therefore put to the door.
This strategy, largely carried by Satya Nadella and encouraged by the Board of Directors of Microsoft, aims to “rationalize” the workings of the company, which always struggles to Get the acquisition of Activision-Blizzard for $ 75 billion in 2023. In slides, several analysts see it as an attempt to reassure the markets and to absorb more quickly the synergies promised during the merger.
But for the industry, the observation is brutal, Microsoft sacrifices part of its creative potential in favor of financial rigor, even if it means disembarking a little more his vision of video games.
