Xbox Division Reportedly Facing Another Round of Layoffs Ahead of Fiscal Year End

Microsoft may be preparing another round of layoffs—this time within its Xbox division. Just days after a report surfaced about cuts to its sales teams, Bloomberg has now reported that the gaming side of the company is next.

Citing unnamed sources familiar with the matter, journalist Jason Schreier says the layoffs are expected to be “substantial” and could be announced as soon as next week. Managers across Xbox are reportedly already bracing for the news.

The timing lines up with Microsoft’s fiscal year, which ends June 30. Large workforce changes often happen around this time, especially during company-wide restructuring efforts.

This isn’t new territory for Microsoft’s gaming arm. In 2024 alone, the company cut over 2,500 positions across Xbox, Activision Blizzard, and ZeniMax. That included 650 roles lost late last year from corporate and support teams.

The shakeup comes even as Microsoft pushes deeper into gaming. It recently revealed next-gen Xbox hardware is in the works and announced its first official handheld console. That’s not all; Microsoft and Meta jointly announced Meta Quest 3S Xbox Edition, yesterday.

On the content side, new titles like Doom: The Dark Ages, Avowed, and Indiana Jones and the Great Circle have helped fill out its first-party catalog. Microsoft is also now taking some of its Xbox exclusives multi-platform, with releases on PlayStation.

For now, there’s no confirmation on which studios or roles could be affected. But if Bloomberg’s report holds, details should surface next week. Meanwhile, Intel is also about to replace marketing staff with Accenture and AI.