Xbox executes remaining 1,600 job cuts, caps management at five layers
Summary
Xbox will cut hundreds more jobs this week and consolidate studios across Xbox Game Studios, Bethesda, Activision, and Blizzard, per The Information.
The cuts execute the remaining half of July's 3,200-role plan, after the first wave delivered 1,600 redundancies.
Platform headcount grew 40% since this console generation began while player base and play time declined, per CEO Asha Sharma's memo.
"The number one measure of your strategy is what you put your resources behind, and we simply spread ourselves too thin"
01
Consolidation spans four publishing groups, now including Blizzard
The first wave removed 1,600 positions, hitting ZeniMax Online, Id Software, Obsidian, and Bethesda.
Xbox has divested five studios since July: Compulsion Games and Double Fine are now independent.
Ninja Theory and Undead Labs entered terms with new owners; Arkane Lyon is in consultation.
Blizzard avoided the first wave but is named among studios hit in this round.
02
Cost structure outgrew player engagement
Platform headcount rose 40% this hardware generation while player base and play time both fell.
Some teams ran with as many as 14 management layers.
Sharma's plan caps future team structures at five layers.
03
Third Xbox restructuring in three years signals sustained cuts
This follows Microsoft's 9,000-job cut across Xbox in summer 2025, which canceled Perfect Dark and Rare's Everwild.
Microsoft cut 1,900 jobs across Activision Blizzard, Bethesda, and Xbox in 2023 and 2024.
Sharma has committed to returning Xbox to growth in 2027.
What this means
For Publishers & Developers: Blizzard's inclusion signals no studio is insulated from Microsoft's consolidation.
For Investors & VC: The 2027 growth target sets a defined window to test whether these cuts restore margin.
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