Xbox is reportedly preparing to cut hundreds of jobs this week and consolidate several game studios, according to a report from The Information. The reported move would add to the major restructuring already announced across Microsoft's gaming division this year.
The latest report does not identify the studios that could be consolidated. It also does not give a final number for the expected job cuts. Microsoft did not publicly confirm the latest plans.
The reported layoffs follow Xbox's July restructuring, when the company announced plans to eliminate around 3,200 roles during fiscal 2027. Around 1,600 positions were scheduled for elimination at that time, with another 1,600 planned before the end of the fiscal year.
The July changes also involved several Xbox-owned studios. Double Fine Productions and Compulsion Games were set to become independent studios. Ninja Theory and Undead Labs entered into plans to move under new ownership. Arkane Lyon was also placed under a strategic review.
Xbox CEO Asha Sharma described the July restructuring as a major reset of the gaming business. She said the company needed to reduce its organisational complexity and change how it manages its studios and projects. The company also said publicly announced first-party games would not be cancelled as part of those July reductions.
The latest reported restructuring comes as Xbox places greater emphasis on its largest game franchises. The Information reported that Sharma is pushing the company to focus more on series such as The Elder Scrolls and Fallout. The strategy also involves reducing investment in some smaller studios acquired in recent years. Xbox had already started moving away from a highly decentralised studio structure during the July reset.
The Information reported that Microsoft is seeking to improve profit margins within its gaming business. For now, the number of employees affected by the latest reported cuts and the studios involved have not been disclosed. Xbox did not confirm when it will formally announce the reported changes.
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