Xbox Reportedly Plans to Lay Off Hundreds of Employees Today and Consolidate Game Studios

[UPDATE 1] Xbox has officially announced the fresh round of layoffs.

[UPDATE] The Verge’s Tom Warren, citing The Information report, explicitly mentioned that the layoffs announcement will come from Xbox today itself.

[ORIGINAL ARTICLE]

Xbox could be heading for another major shake-up. Microsoft’s gaming division is reportedly preparing to lay off hundreds of employees this week while also consolidating several of its game studios, according to The Information, which cited a person briefed on the plans.

If true, it would mark another significant round of layoffs for Xbox this year, as CEO Asha Sharma continues to reshape the gaming business around profitability and its biggest franchises.

Xbox could lay off hundreds of jobs in another major shake-up

The news outlet adds that the latest layoffs are expected to affect hundreds of Xbox employees. The company is also planning to consolidate several game studios as part of the restructuring. The reported layoffs come just months after Xbox announced a much larger round of layoffs.

In July, Asha Sharma told staff that Microsoft would eliminate 1,600 additional roles by the end of the year, following another 1,600 job cuts announced that month. By now, you must be aware that Xbox has also sold four of its game studio subsidiaries during the July restructuring, hinting that it wants to reduce the size of its gaming operation.

Microsoft has not publicly confirmed the latest reported layoffs.

Xbox is reportedly focusing on its biggest franchises

The latest restructuring is reportedly part of Sharma’s broader strategy for Xbox. According to the report, the company wants to improve profit margins while putting more resources behind major franchises such as The Elder Scrolls and Fallout. That reportedly means reducing its focus on smaller studios that Xbox acquired in recent years.

Sharma took over the Xbox CEO role earlier this year and has moved quickly to overhaul the business. Microsoft CEO Satya Nadella and CFO Amy Hood have previously discussed restructuring Xbox or potentially spinning out the gaming unit, according to The Information, although the company’s leadership has more recently backed Sharma’s current plans.

If the reported layoffs happen this week, they would add another major chapter to Microsoft’s ongoing Xbox restructuring, with the company seemingly becoming more selective about where its gaming investments go.