Xbox CEO Asha Sharma has confirmed what many in the industry suspected for months: Microsoft is executing the largest restructuring in the history of its gaming division. The plan spans one year and will affect more than 3,200 employees across the board.
Immediate layoffs and studio departures
The most immediate impact hits today. Approximately 1,600 staff members are being laid off effective immediately as part of this initial wave. This represents a significant chunk of the division’s workforce and signals a sharp pivot in Microsoft’s gaming strategy.
Beyond headcount reductions, five game development studios are officially leaving the Xbox brand. While specific names were not detailed in the initial announcement, these departures suggest a consolidation of resources or a shift away from certain internal development priorities.
A year-long transition
The restructuring is not limited to today’s cuts. Sharma outlined a comprehensive plan that will continue over the next 12 months, affecting an additional 1,600 roles through attrition, voluntary separation programs, or further reductions. The total impact exceeds 3,200 positions.
What this means for you
For everyday Windows and Xbox users, the immediate effect may be subtle. Game releases currently in development might see delays or changes in scope as teams are reorganized. However, Microsoft has historically maintained support for existing hardware and services during such transitions. Keep an eye on official channels for updates regarding specific titles or studio closures that may impact your library.
Source: Neowin
Over to you: Do you expect this restructuring to delay upcoming game releases, or will Microsoft maintain its current launch schedule?
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