Xbox lays off 3,200 workers in major restructuring

Microsoft's Xbox division has laid off approximately 3,200 employees, about 20% of its workforce, with half terminated immediately and the remaining 1,600 over the next 12 months. The cuts follow a memo from new CEO Asha Sharma, who took over in February, outlining plans to 'reset the business' and focus on blockbuster franchises like Fallout and The Elder Scrolls. Affected studios include ZeniMax Online Studios, Bethesda Game Studios, and id Software. Workers described the layoffs as a 'bloodbath' and expressed shock at the scale. Former employees argue the cuts eliminate decades of talent and question the company's ability to deliver on its 'bigger future' promise. The layoffs are part of a broader industry trend, with nearly 58,000 video game jobs cut since 2022, driven by post-pandemic over-hiring and rising production costs. Xbox's shift away from the Game Pass subscription model, championed by former CEO Phil Spencer, aims to prioritize major series. Unions affiliated with the Communication Workers of America plan to hold rallies and engage in effects bargaining for severance and reinstatement.