Overview
- Xbox began the first wave of layoffs this week, letting go about 1,600 employees immediately on Monday and planning to reduce roughly 3,200 roles, or about 20% of its games staff, by the end of the next 12 months.
- The company will sell or spin out Ninja Theory, Undead Labs, Double Fine and Compulsion Games and is starting a strategic review of Arkane in France, with more than 350 employees expected to leave Xbox as part of those moves.
- Xbox leadership says the unit is losing money and has operating margins only a fraction of peers, and internal reporting shows Game Pass users are far below prior projections with roughly 30 million subscribers versus a 77 million forecast.
- Work on the next‑generation console project codenamed Helix and core hardware engineering teams are reported to be largely intact as the division shifts resources toward building a profitable device and tighter studio road maps.
- The cuts have hit major studios and workers hard — reports show heavy job losses at id Software and Obsidian — and unions and studio leaders have pledged support for affected employees while the company reallocates spending toward AI and data‑center priorities.