The state of play after a truly torrid week for Xbox
None of my usual jovial ramblings this week. I doubt anybody is in the right headspace.
We knew it was going to be a dismal few days, but I didn’t expect it to play out quite like this. I’m sure those more financially astute than myself will have thoughts on what the 3,200 job cuts announced by Xbox on Monday will mean for the company’s business, but the way in which the layoffs have been handled is baffling.
In her memo to staff, Xbox boss Asha Sharma said the move is about eliminating management layers to create a “flatter organization that is built around makers,” but if you look at who has actually been put to the sword—either by sifting through WARN notices or glancing at the mausoleum that has become LinkedIn—it appears a significant chunk of those laid off are the senior staffers and team leads who will have been integral to video game production. You know, the “makers.”
I’ll have more on this next week, but multiple sources have told me that Xbox not only failed to handle the internal layoff announcement with a shred of compassion, but has seemingly condemned key studios like id Software and Zenimax Online Studios to a slow, tortuous death.
If you’re interested in hearing my initial reaction to the news, feel free to read the op-ed I published earlier this week. If you don’t have the energy to pore over what’s essentially a 1,000 word rant (trust me, I get it), I’ll just leave you with this: who is going to save Xbox when there are no developers left? Because I can guarantee it won’t be the C-suite.
via Game Developer // On Monday, Xbox boss Asha Sharma set the tone for an absolutely diabolical week by immediately laying off 1,600 employees, before promising that another 1,600 people will be kicked to the curb before the fiscal year is out. The division also cut loose notable studios including Double Fine, Compulsion, Ninja Theory, and Undead Labs. The news marks the fifth major round of mass layoffs at Xbox in three years.
via Game Developer // Although Microsoft failed to disclose how individual Xbox studios would be impacted by the cuts, a WARN notice obtained by Game Developer showed that ZeniMax laid off 158 people in the U.S. state of Texas. That included a significant number of people (the majority of whom were union members) assigned to the office of Doom: The Dark Ages developer id Software—which this week launched a DLC for the popular shooter. Impeccable timing.
via Fortune // After announcing the largest restructure in Xbox history, Sharma sat down with Fortune to wheel out the excuses: Xbox has spread itself too thin by spending money hand over fist. A component crisis is battering the hardware business. You’ve heard them all before, but what does the future hold for the video game division? Well, according to Sharma, not much in the way of optimism. “I think our core has to be healthy, and that will be necessary but not sufficient,” she said. Talk about a masterclass in motivation.
via Game Developer // In the midst of all the chaos, unions within Xbox began fighting back across the U.S. and Canada. During a brief email exchange with Game Developer, CWA Canada president Carmel Smyth revealed every single Bethesda Game Studios employee laid off in Montreal was a union member and slammed Microsoft for engaging in what some workers purportedly claimed is essentially “psychological warfare.”
via Game Developer // As the week wore on, an email sent to Blizzard Entertainment employees by studio president Johanna Faries confirmed the division had laid off a “small number” of staff in China. It’s unclear how many roles were impacted.
via Game Developer // Another WARN notice revealed that 379 workers based at the offices of Zenimax in Maryland have been jettisoned by Microsoft. That total includes 213 employees assigned to the office of The Elder Scrolls Online developer ZeniMax Online Studios, which also faced layoffs in June 2025.
via Game File // At least 52 employees at the office of The Outer Worlds and Avowed developer Obsidian in California were also laid off. This time, a WARN notice obtained by Game File confirmed the cuts. It’s unclear how many people remain at the studio, which has been one of the most prolific under the Xbox banner.
via Game Developer // The U.S. Federal Reserve proved without doubt that comedy is all about timing by appointing Xbox CEO Asha Sharma to its new ‘Productivity and Jobs’ task force mere days after she decided to feed thousands of workers into the metaphorical meat grinder. Reboot the simulation. This one is cooked.
