Unionized workers at Xbox have formally requested immediate bargaining for layoff protections, responding to reports of substantial cuts expected within Microsoft's gaming division. These union members, represented by the CWA, are aiming to secure safeguards ahead of what is anticipated to be a significant wave of redundancies.
Recent reports from Bloomberg's Jason Schreier have suggested that the upcoming layoffs at Xbox could be severe, potentially impacting developers and leading to studio closures. Word of potential staff reductions and the shutdown of development studios has become widespread following a warning from Xbox CEO Asha Sharma regarding the console maker's profit margins. While specific studios like Compulsion Games, Double Fine, and Ninja Theory have been mentioned as potentially facing closure, the details remain unconfirmed.
Concerns have been raised regarding the announcement of Ninja Theory's new game, Senua, during the Xbox Games Showcase. Allegations suggest that Microsoft revealed the game knowing the studio's potential closure, possibly to attract investor interest. This has led to speculation that Senua may not be released.
Microsoft previously conducted significant layoffs in its gaming division in July 2025, which resulted in game cancellations, such as Rare's Everwild, and the closure of studios like The Initiative. Current Xbox staff are reportedly preparing for a similar scenario approximately one year later.
Since 2022, over 3,500 Xbox workers have chosen to unionize with the CWA, a process facilitated by Microsoft's agreement to a neutrality framework. This framework allowed employees to form unions without fear of retaliation.
Details about the full scope of Microsoft's gaming business, which includes major studios and franchises such as The Elder Scrolls, Fallout, Halo, Gears of War, Forza Horizon, Call of Duty, Diablo, World of Warcraft, Candy Crush, and Minecraft, remain unclear. Recent reports indicate that CEO Asha Sharma is accelerating development on new entries in The Elder Scrolls, Fallout, and Halo series as part of a strategic reset. The Information has also reported that Microsoft is considering operating Xbox as a wholly-owned subsidiary, a joint venture, or even potentially selling the brand.