Xbox is reportedly preparing for three additional rounds of employee layoffs as part of CEO Asha Sharma's ongoing initiative to reset the business and return the division to profitability. According to a report from Fortune Magazine, citing individuals familiar with the plans, the first wave of these upcoming cuts is expected to occur this month, with subsequent rounds scheduled for November and January 2027. These plans remain subject to change.
This news follows a recent round of layoffs in September, which saw 268 roles eliminated and organizational adjustments, including the integration of Obsidian under Bethesda and Rare and World's Edge joining Activision. These September cuts were part of what is considered the second major phase of Xbox's cost-cutting strategy. The initial and largest wave of job reductions took place in July, impacting over 1,600 employees. The remaining 1,600 planned cuts are anticipated to be distributed across future quarters, concluding in early 2027.
The report does not specify which teams might be affected by these forthcoming layoffs, particularly given the significant cuts that have already impacted some of Xbox's largest and most established studios. A point of notable uncertainty surrounds the future of The Coalition, the studio behind the Gears of War franchise. The studio recently released Gears of War: E-Day, which appears to have had a less robust sales performance than anticipated. Developers at The Coalition have expressed concerns about potential staff reductions following the game's launch, with some fearing that the timing of layoffs could prevent employees from receiving promised bonuses.
Given the current date in October, if the reported timeline is accurate, employees could receive news of further layoffs this week or next. The same report also indicated that internal projections for the next-generation "Helix" consoles place their cost between $1,200 and $1,800.