Microsoft to announce Xbox layoffs and studio closures

Microsoft is preparing to announce a significant wave of layoffs and studio closures within its Xbox division, with the details expected to be finalized on Monday, July 6. The restructuring will affect several thousand employees across the company, including its sales, consulting, and gaming divisions, representing less than 2.5 percent of Microsoft's global workforce.

The planned cuts are part of a strategic reset for the Xbox business, which new CEO Asha Sharma stated last month is "not in a healthy spot." The strategy involves reallocating resources to invest more heavily in the company's largest franchises, such as Halo, Gears of War, Fallout, and The Elder Scrolls. To fund this shift, cuts are being made elsewhere in the portfolio.

Several prominent development studios are reportedly at risk, with Compulsion Games, Ninja Theory, Double Fine, and Undead Labs named as being in negotiations with Microsoft to avoid closure. Arkane Studios, the developer behind the in-production Marvel's Blade game, has also been cited in reports as a potential target. Microsoft is reportedly attempting to find buyers for some studios before deciding to close them.