In a significant development shaking the tech industry, Microsoft has initiated another round of layoffs, marking its second major workforce reduction in 2025. The company announced the elimination of approximately 9,000 positions across various divisions, representing nearly 4% of its global workforce.
Impact on gaming division
The Microsoft layoffs have particularly affected the company’s gaming sector, with several prominent studios facing cuts or closure. The Xbox division, which has been a significant revenue generator for Microsoft, saw substantial restructuring across multiple development teams.
Affected studios and projects
- King (Candy Crush developer) – Stockholm office reduced by 10%
- ZeniMax Media operations
- Raven Software teams
- Sledgehammer Games personnel
- Halo Studios restructuring
- Turn 10 Studios adjustments
Project cancellations
Several high-profile gaming projects faced cancellation as part of Microsoft’s restructuring efforts. The Initiative, established to create AAA exclusive titles, was closed following the cancellation of its Perfect Dark reboot. Additionally, Rare’s ambitious project Everwild and an unannounced ZeniMax Online Studios venture were terminated.
Strategic rationale
Microsoft’s decision to implement these layoffs stems from a broader organisational restructuring initiative. The company aims to streamline operations, reduce management layers, and adapt to evolving market conditions. This strategic move reflects the tech giant’s response to changing industry dynamics and economic pressures.
Future implications
As Microsoft navigates through these layoffs, the impact on future game development and studio operations remains to be seen. The restructuring signals a shift in the company’s approach to gaming content creation and resource allocation.
