Key Takeaways
1. Microsoft laid off 9,100 workers, nearly 4% of its total staff, with significant cuts in the Xbox division.
2. Xbox Game Studios is still developing over 40 games despite the layoffs, emphasizing a focus on exciting game creation.
3. Major projects like the Perfect Dark reboot and Rare’s Everwild have been canceled, impacting long-standing staff.
4. Turn 10, the Forza Motorsport studio, experienced a workforce reduction of about 50%, but Xbox CEO Phil Spencer is not retiring.
5. Microsoft maintains a positive outlook, with many upcoming titles still on track for release, aiming to realign priorities for future success.
A large number of layoffs happened at Microsoft earlier this week, with the company deciding to part ways with 9,100 workers, which is nearly 4% of its total staff across various departments. The Xbox division faced significant cuts, being one of the most affected areas.
Game Development Continues
Even with the layoffs, Xbox Game Studios has confirmed that over 40 games are still actively being developed. This information came from an internal message sent by Matt Booty, the head of Xbox Game Studios. Booty emphasizes that the company is still focused on its main strategy of creating exciting games for players and expanding its biggest franchises.
Cancellations and Changes
Unfortunately, the layoffs also led to the cancellation of the Perfect Dark reboot and the shutdown of its studio, The Initiative. Additionally, Rare’s project Everwild, which had been in the works for nearly a decade and even had a trailer released in July 2020, has now been scrapped. Consequently, Rare’s long-time director and executive producer for Everwild has left the studio after 35 years of service.
Staff Reduction Impact
The studio known for Forza Motorsport, Turn 10, reportedly saw half of its workforce laid off during this round of cuts. There were whispers that Xbox CEO Phil Spencer might also be among those leaving, but Microsoft has clarified that he won’t be retiring “anytime soon.”
In the restructuring process, an unannounced project from Zenimax Online Studios was also put on hold, which coincided with the exit of studio head Matt Firor, who had been with the company for 18 years.
Positive Outlook
However, Booty’s message was straightforward. The majority of Xbox’s game lineup remains intact, and the company is “keeping momentum on titles being released this fall, along with a strong lineup leading into 2026.”
This means that all the games recently showcased at the Summer Game Fest and Xbox Games Showcase are still under development. Key titles include Clockwork: Revolution, Call of Duty: Black Ops 7, and State of Decay 3. Furthermore, active games that are nearing release include: The Outer Worlds 2, set for October 29, High on Life 2 for Winter 2025, NINJA GAIDEN 4 for October 21, Grounded 2 for July 29, and Gears of War Reloaded for August 26, 2025.
These layoffs have understandably caused concern among many industry analysts and developers regarding the future of Xbox and gaming as a whole. Nevertheless, Microsoft’s leadership maintains that the layoffs are part of a larger plan to “realign priorities and focus resources to prepare our teams for greater success within a changing industry landscape.”
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