Microsoft Plans Major Xbox Layoffs, Studio Closures, and Potential Cancellation of Blade Game

Microsoft is planning to cut under 2.5% of its workforce (approximately 5,000–5,700 jobs) in a new wave of layoffs expected as early as next week Source: Fox Business, CNA. The cuts will hit sales, consulting, and the Xbox gaming division, which is undergoing a major restructuring under new CEO Asha Sharma.

Xbox Reset and Studio Closures

Asha Sharma and chief content officer Matt Booty warned staff of an "Xbox reset" in early June, citing a 3% accountability margin, higher console component prices, and an "over-extended" studio system Source: The Verge. Reports indicate Microsoft is considering closing at least five studios: Compulsion Games, Double Fine, Ninja Theory, Undead Labs, and Arkane Studios Source: Engadget. The company is also exploring spinoffs or sales for some studios. The layoffs are expected to start on July 6 and could impact at least 1,000 Xbox employees Source: The Verge.

Blade Game and Arkane

Microsoft is weighing cancellation of Marvel's Blade, a game developed by Arkane Studios that is reportedly over budget and delayed to 2027 Source: The Verge. Arkane itself may be sold or closed. The union CWA has called for transparency and good-faith bargaining, arguing that the money exists to avoid layoffs Source: Engadget.

Fox Business reports the layoffs could total 5,000, while CNA says 2.5% would equal around 5,700. The Verge notes Xbox-specific cuts are at least 1,000. The disagreement reflects varying scopes: company-wide vs. gaming division.