Microsoft Lays Off More Than 500 Employees In Its Gaming Division

Additionally, other European offices like Zenimax, a name that recently made headlines for the historic agreement its quality assurance workers’ union reached with Microsoft, also began informing staff that cuts are expected. IGN reports that Bethesda is also impacted by the cuts. Overall, Microsoft plans to cut approximately 9000 workers across teams and geographies. 

If this headline in particular feels like the worst case of deja vu ever, there’s a good reason for that. Over the last 18 months, this is the fourth mass layoff at Xbox. The others include: layoffs in May of this year, layoffs in September 2024, and layoffs in January 2024. This is on top of multiple studio closures that occurred in May 2024, which included the Redfall team, Arkane Austin, and the team behind The Evil Within and Hi-Fi Rush, Tango Gameworks. The latter studio has since been reopened under PUBG publisher Krafton as Tango Gameworks Inc.  

Notably, this is all following Microsoft’s massive acquisition of Activision Blizzard for an eye-watering $68.7 billion, which was finalized in October 2023. When this deal was first announced, it came with enough implications of overconsolidation that the FTC tried to block it on antitrust grounds.

It’d be an understatement to say that the game industry has been rocked by instability over the last few years, with the above headline playing out across numerous studios. With a multi-trillion-dollar company like Microsoft once again appearing in this pattern of disruption, this most recent round of cuts is a reminder that the industry as it once was is likely no more.