Microsoft is reportedly gearing up for another round of significant layoffs within its Xbox division, potentially as soon as next week. Sources from Bloomberg and The Verge reveal that these cuts will be widespread, affecting various departments, particularly sales teams. This move comes as Microsoft restructures its central Europe Xbox distribution and plans to cease operations in certain regions.
The layoffs are expected to precede the launch of Microsoft’s next-generation Xbox consoles, powered by a new partnership with AMD. Despite the anticipation, Microsoft has not yet announced a release date for these new devices.
Employees within the company, speaking anonymously, express a sense of inevitability about the layoffs, highlighting a tense atmosphere. This is not the first wave of cuts; since acquiring Activision Blizzard for $69 billion, Microsoft has made multiple reductions in its gaming workforce, including 1,900 layoffs in January 2024, further cuts following the closure of studios like Arkane Austin and Tango Gameworks, and a massive 6,000 staff reduction in May 2025.
Xbox head Phil Spencer acknowledged the difficult decisions involved, emphasizing the need to maintain a sustainable and growing business despite the challenges.
This ongoing restructuring signals a turbulent period for Microsoft’s gaming division as it prepares for future hardware launches and market shifts.
