A report indicates that Microsoft is preparing for a significant wave of layoffs within its Xbox division in the coming week

There are reports indicating that Microsoft is planning significant job cuts at its Xbox division in the upcoming week.

Bloomberg reports that Xbox managers are expecting these substantial layoffs as part of a broader restructuring within Microsoft. The company has yet to provide a statement. This comes amidst an ongoing reorganization effort within the corporation.

The anticipated layoffs follow those from May 2025, where Microsoft let go of 3% of its workforce. Additionally, there was a smaller reduction in workforce earlier in January 2025.

Previously, in January 2024, the gaming sector saw a reduction of 1,900 positions. This was followed by the cut of another 650 employees in September of the same year.

In May 2024, it was disclosed that four studios under Bethesda, a Microsoft subsidiary, were scheduled for closure, though some employees were reassigned to different projects. Tango Gameworks, one of these studios, avoided closure as it was acquired by Krafton.

For the third quarter of 2025, Microsoft reported a 5% increase in revenue for its gaming division compared to the previous year.

GamesIndustry.biz has requested a statement from Xbox regarding the layoffs and will provide updates if official comments are received.