Microsoft's Xbox division is planning to cut around 3,200 jobs during fiscal 2027, with about 1,600 of those coming right away, as part of its biggest restructuring yet. The shake-up will also involve the potential spin-off or sale of several game studios, a move to streamline management, and a shift in focus towards the company's top gaming franchises. In an internal memo, Xbox leaders pointed out that their business has been running with profit margins that are three to ten times lower than those of similar platforms and publishing companies, while growth for Game Pass and multi-platform projects has been slower than hoped. As part of the changes, studios like Compulsion Games and Double Fine Productions will operate independently, while Ninja Theory and Undead Labs will change hands, and Arkane Studios is looking into its options in France. The restructuring is hitting Bethesda and ZeniMax Media hard, with a WARN notice filed in Texas revealing that 158 employees have been laid off, including 136 at id Software in Richardson and 22 at Bethesda Game Studios in Austin, and reports suggest that id Software has lost about half its staff, particularly impacting its quality assurance team.
Microsoft CorporationXbox division cutting 3,200 jobs and restructuring due to low profit margins and slower-than-hoped growth