Xbox reportedly set for second wave of layoffs

Xbox is preparing to lay off hundreds of employees and consolidate several of its game studios this week, according to a report from The Information that cited a source briefed on the plans. The report did not name which studios would be affected or consolidated. If confirmed, the move would mark the second wave of Xbox layoffs in 2026, following a restructuring in July that cut 1,600 jobs and divested five studios: Double Fine Productions, Compulsion Games, Ninja Theory, Undead Labs, and Arkane. The reported cuts form part of a broader restructuring under Xbox CEO Asha Sharma, who has said the company would reduce a further 1,600 roles and return to growth in 2027. It remains unclear whether this week's reported layoffs would cover the full remaining number or only part of it. In a memo to staff, Sharma said Xbox was "simply spreading itself too thin" and outlined plans to cap management layers at five, addressing what she described as teams with as many as 14 layers. She also said platform teams had grown by 40 percent since the start of the current hardware generation while player base and overall play time had declined.