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- Fresh reports suggest hundreds of jobs could be cut across XBOX's game studios, leaving the future of several well-known developers hanging in the balance.
- One name on the list has left many fans scratching their heads: Undead Labs.
- The timing of these reports is also notable.
Fresh reports suggest hundreds of jobs could be cut across XBOX's game studios, leaving the future of several well-known developers hanging in the balance.
The vibe around XBOX has shifted dramatically as new reports claim Microsoft is contemplating one of the biggest layoffs in the history of the gaming company. With the company’s financial year winding down, concerns are rising that numerous first-party studios may soon face significant layoffs, and in some circumstances, perhaps shut down.
Microsoft is looking to cut expenses and the reductions might touch hundreds of staff across XBOX Game Studios, the sources said. While the corporation itself has not yet officially commented, the size of the reported cuts has already created alarm among developers and fans alike.
The rumors have named a few familiar names from the studios. Double Fine Productions could reportedly lose around 100 employees if it shuts down. Undead Labs, the team behind State of Decay, is said to be facing cuts of roughly 110 jobs.
Compulsion Games might cut 90 people, while Ninja Theory might see as many as 135 positions depart. Altogether, that adds up to more than 430 jobs at risk across just four studios. The reported cuts may not stop there.
Larger XBOX-owned teams like Bethesda and Blizzard are also expected to see layoffs, though the sources say these are thought to be percentage-based cuts rather than outright studio closures. If that happens, the impact could stretch across nearly every corner of Microsoft's gaming business.
One name on the list has left many fans scratching their heads: Undead Labs.
The studio recently made a strong appearance during XBOX's latest showcase, offering an extended look at State of Decay 3 and giving fans confidence that development was progressing well. That has now raised a difficult question. Why heavily promote a game if the team behind it is about to be hit by major layoffs?
Some industry observers believe the game could be close enough to completion that Microsoft feels comfortable reducing the studio afterward. Others think the company could explore selling or spinning off certain teams instead of closing them outright.
For now, those remain theories, with no official confirmation from Microsoft. Behind the scenes, signs of change have already started to appear. Microsoft has been scaling back contracts with outside partners and vendors as it prepares for broader restructuring.
Earlier reports linking layoffs at a public relations agency directly to XBOX were later clarified, with the agency explaining the cuts were part of a wider company reorganization, although some staff working on XBOX-related accounts were affected.
The timing of these reports is also notable.
Microsoft's fiscal year ends at the close of June, and major corporate changes often follow once a new financial year begins. That has led many to believe any official announcements could arrive within days. For XBOX, the coming week could shape the future of several beloved studios and the games they're working on.
After years of expanding through major acquisitions, Microsoft may now be entering a new phase focused on trimming costs and restructuring its gaming business. Whether these reported layoffs end with smaller teams, studio closures, or a different strategy altogether remains to be seen. One thing is clear: XBOX fans and developers will be watching closely. So, when the dust settles, which studios will still be standing, and what will XBOX look like on the other side?
