Xbox is reportedly set to implement another round of substantial layoffs, impacting hundreds of employees and leading to the consolidation of several game studios. This news follows an earlier round of cuts in July that saw approximately 1600 staff members dismissed and multiple studios parting ways with Microsoft.
The report, originating from The Information and corroborated by VGC, suggests that hundreds of staff members will be terminated this week. It also indicates that Xbox intends to "consolidate" some of its game studios. While specific details on the nature of these consolidations remain scarce, The Information has hinted at potential mergers or restructuring across Xbox's publishing labels, which include Xbox Game Studios, Bethesda, Activision, and Blizzard.
Jason Schreier, a reporter for Bloomberg, suggested on the 8-4 Play podcast that layoffs at Blizzard are imminent. This comes after Xbox CEO Asha Sharma announced in July that the company planned to lay off a total of 3200 people over the course of their current fiscal year, with the initial wave accounting for half that number.
The July layoffs resulted in several studios becoming independent or finding new ownership. Compulsion Games, the developers behind South of Midnight, and Double Fine, known for Psychonauts, regained their independence. Undead Labs (State of Decay) and Ninja Theory (Hellblade) were reported to have found new owners, while the future of Arkane (Dishonored) was uncertain at the time.
These earlier cuts also affected studios such as Bethesda, Id Software, ZeniMax Online, and Obsidian. Following these changes, Xbox shifted its strategic focus towards established franchises, a move that reportedly saw Obsidian tasked with working on a new Fallout game.
This ongoing series of layoffs and restructuring within Xbox follows Microsoft's broader workforce reductions announced earlier this year. Microsoft, the parent company of Xbox, is currently facing a boycott movement from BDS over its reported ties to the Israeli military.