Microsoft reportedly set to undertake significant Xbox staff reductions

According to a report by Bloomberg, Microsoft is preparing to implement a substantial round of layoffs at Xbox, with the changes expected to occur next week. The news outlet cites sources within Xbox, indicating that management is bracing for considerable personnel cuts. Microsoft has declined to comment on the matter. The layoffs are reportedly part of a broader company-wide restructuring initiative. This move follows a series of recent staff reductions at Microsoft, including a 3% workforce cut in May 2025 and an earlier round of layoffs in January 2025. In the gaming division specifically, 1,900 roles were eliminated in January 2024, and an additional 650 staff members were let go in September 2024. Furthermore, in May 2024, it was announced that four studios under the Bethesda subsidiary would be closed, with some staff members reassigned to other teams. Notably, one of the affected studios, Tango Gameworks, was later acquired by Krafton and spared from closure. Despite these cuts, Microsoft's gaming segment reported a 5% year-over-year revenue increase in its recent Q3 2025 results. GamesIndustry.biz has reached out to Xbox for comment and will provide updates if the company responds.