The President of Xbox recently posted an inspirational message about teamwork under pressure. But for many within Microsoft’s gaming division, the timing of that message couldn’t be more ironic. Sarah Bond’s statement—“The truest measure of any team is not the score but what they do when things are really, really hard”—came just two months before news broke of yet another devastating round of Xbox layoffs.
Curious LinkedIn post here. Is Sarah Bond letting people know they’re about to have massive layoffs at Xbox? pic.twitter.com/lpmZeu3Xdp
— Smash JT (@SmashJT) May 23, 2025
According to IGN, Microsoft has laid off approximately 9,100 employees—4% of its total workforce—with a substantial portion of those cuts targeting the gaming division. The blow was felt across multiple branches, including King (the mobile developer behind Candy Crush) and Bethesda’s London office. These layoffs follow a brutal 18-month stretch for Microsoft’s gaming business, marking the fourth major round of cuts since the company completed its $69 billion acquisition of Activision Blizzard.
A screenshot from the trailer to Gears of War E Day – YouTube, Xbox
While Xbox executives have offered vague reassurances about the company’s future, morale within the gaming staff appears to be at a breaking point. In an internal memo, Xbox CEO Phil Spencer attempted to justify the cuts as part of a strategy to “prioritize the strongest opportunities” while pursuing “strategic growth areas.” Spencer stopped short of naming the projects being cut, but staff are already speaking out—some anonymously—about the toll these decisions are taking.
One of the most high-profile casualties of this round of layoffs is the cancellation of an unannounced MMORPG in development at ZeniMax Online Studios, the makers of Elder Scrolls Online. Bloomberg confirmed the project’s shutdown, dealing a blow to fans who had been hoping for a new entry in the genre under the Xbox banner.
Bloomberg News: “The new MMORPG project from Zenimax Online Studios, maker of Elder Scrolls Online, has been canceled as part of the Xbox layoffs” pic.twitter.com/YdxHauI7vP
— Wario64 (@Wario64) July 2, 2025
The layoffs also seem to contradict Microsoft’s narrative of growth and momentum. Just weeks ago, Spencer touted Xbox’s growing player base, game pipeline, and hardware roadmap as stronger than ever. Yet under the surface, developers had already begun bracing for more cuts. A source told IGN that fear of layoffs had become the norm, not the exception.
And they have reason to worry.
Since January 2024, Microsoft has now laid off over 8,000 gaming staff:
• January 2024 – 1,900 layoffs
• Post-Redfall/Tango Closure – Hundreds more
• September 2024 – 650 laid off
• May 2025 – 6,000 employees cut
• July 2025 – The latest round, part of the 9,100 company-wide reduction
Promotional material of Master Chief against a Covenant via Xbox Wire
These decisions have impacted both legacy Xbox studios and newly acquired teams from Activision Blizzard. Even flagship franchises like Halo, Call of Duty, World of Warcraft, and Diablo now reportedly operate in an environment of constant restructuring and uncertainty.
Meanwhile, Sarah Bond’s LinkedIn post from earlier this year now reads less like encouragement and more like foreshadowing.
To those affected, those words may sting. Because for thousands of talented developers and support staff, things just got a lot harder—and the scoreboard shows another round of corporate consolidation at the expense of creative talent.
A Pattern of Cuts
What’s most troubling is the pattern. Every few months, Xbox seems to swing the axe again to bring layoffs across the board, raising questions about what, if anything, Microsoft actually gained from acquiring Activision Blizzard beyond a few top-selling franchises. At the same time, key projects are being shuttered, development teams gutted, and fan goodwill is vanishing.
If this is the future of Xbox—fewer studios, fewer games, and fewer developers—what was the point of the merger in the first place?
The Xbox Series X Console – YouTube, Xbox
Phil Spencer may claim this is all part of a “sustainable business,” but for those on the ground, sustainability feels like a buzzword masking the unraveling of an industry giant.
And with next-gen Xbox consoles on the horizon and Gamescom around the corner, the company will soon be forced to show exactly what’s left of its vision.
How do you feel about these Xbox layoffs? Sound off in the comments and let us know!
Hopefully they shut down woke af Halo Studios as soon as possible.
It makes me sick to see companies this flush and profitable ditch the employees who contributed, all while the upper ranks reap the rewards. And Microsoft is very top heavy.
Granted, not all employees contribute equally. After the independent contractor suit in the late 90s, Microsoft had to grow larger than I don’t think they knew how much of their business relied on contractors. And they didn’t learn another way of doing business so instead they just absorbed many of the contractors as employees. At a time MS was considered one of the most picky companies when it came to recruiting for full timers this watered down the overall quality of employee.
Facebook is a fraction of the size, Amazon is larger, but they have a ton of warehouse employees, Apple – which requires a similar scope of departments as Microsoft is about 75% the size. Even Google is smaller.
Xbox is going to be the next SEGA and ATARI.
Good riddance. They have NEVER been a good Console and have always failed at the most important thing, games. Ever since the original Xbox their games have been on PC, so this was only a matter of time.
I’m all for competition, but when the competition is trying to “out Woke” the other, it’s Gamers who lose in the end.
I heard a comment from Elon Musk that said something to the tune of: It’s not Apple with a worm, it’s a ball of worms beneath an apple’s skin. That microsoft xbox logo is a perfect example of what I imagine is going on at the game division. In context to Musk’s quote.
I’m that guy…. decimate means removing one-tenth, yet lately it’s being used synonymously with the word obliterate.
I love language and am victim of ignorance. I did not know that but knowing that base-ten is “dec”, I should have.
I’m a fine art fan, and I never really considered the word “iconic” until Ghost posted an article here, a short spell back.
The Manjaw Perfect Dark game getting the axe alongside these layoffs is another win.