Department affected: Xbox / Gaming (Xbox Game Studios and related corporate positions).
Based on news reporting.
Microsoft began executing a sweeping round of job cuts in its Xbox/gaming division on July 6, 2026, affecting thousands of employees across Xbox, sales, consulting and five first‑party studios. Multiple studios are closing or facing sale/closure, including confirmed closures at Ninja Theory, Double Fine and Compulsion Games (together ~325 jobs at risk) and additional exposure from Undead Labs (~110) and Arkane Lyon, with sources and industry estimates describing the event as involving thousands of positions and potentially the largest single gaming‑industry layoff in history. The cuts follow an Xbox Reset memo citing sustained multi‑billion dollar content spending, low Xbox profitability (approximately 3% projected for FY2026), falling gaming revenue, and Game Pass accounting dynamics that penalized studio performance. Microsoft said it is negotiating with unions and did not confirm exact studio details; the company is also reallocating capital toward massive AI and cloud infrastructure spending.
Microsoft Corporation cut 3,000 jobs affecting its Xbox / Gaming (Xbox Game Studios and related corporate positions) team as of July 6, 2026.
That is roughly 1.3% of the 228,000 people Microsoft Corporation employs.
LayoffTalk has tracked 51 layoff events at Microsoft Corporation since January 2023, affecting a combined 124,423 employees.
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