Xbox’s Stunning Studio Shakedown: What’s Behind This Week’s Major Cuts?

Xbox to Lay Off Hundreds as Part of Studio Consolidation

Microsoft’s Xbox division is expected to implement another round of layoffs, reportedly impacting hundreds of employees this week as the company consolidates several of its studios. This news comes from an exclusive report by The Information, which cites an anonymous source familiar with the company’s plans. Specific studios affected by this consolidation have not been disclosed.

If these reports are accurate, this would signify the second major wave of layoffs for Xbox in 2023, following significant restructuring in July that resulted in 1,600 job cuts. This strategy is part of an initiative led by Xbox CEO Asha Sharma to “reset” the gaming division and restore profitability. Sharma had announced plans for additional layoffs, potentially totaling another 1,600 jobs, before a year had elapsed since the July cuts.

The previous layoffs in July impacted nearly all of Xbox’s studio portfolio. While most teams faced reductions, some studios, such as Double Fine Productions and Compulsion Games, managed to regain their independence. In contrast, studios like Ninja Theory and Undead Labs were sold to unknown buyers, while Arkane Lyon is currently undergoing consultations regarding its future.

Sharma’s vision for Xbox focuses on a renewed emphasis on its largest franchises, such as The Elder Scrolls and Fallout, which were also affected by the earlier layoffs, particularly Bethesda and Zenimax Online, the developer behind Elder Scrolls Online. Additionally, id Software, known for games like Doom and Quake, experienced substantial cuts in the previous restructuring.

Following the July layoffs, employee morale at Xbox reportedly suffered, and further layoffs this week are unlikely to improve the situation.

News Courtesy of Eurogamer