According to a report, Microsoft is preparing for a "major" wave of layoffs in its Xbox division slated for next week

Reports indicate that Microsoft is preparing for significant workforce reductions within its Xbox division in the coming week. According to Bloomberg, substantial layoffs are expected by Xbox management; however, Microsoft has not commented on the subject. This restructuring aligns with broader organizational changes across the company.

Previously, Microsoft executed layoffs impacting 3% of its workforce in May 2025, following a smaller workforce reduction earlier that January. The gaming sector has witnessed major headcount reductions, eliminating 1,900 positions in January 2024, followed by another 650 in September 2024.

A shake-up in May 2024 resulted in four studio closures under Bethesda, though some employees were reassigned. Tango Gameworks was notably acquired by Krafton, avoiding closure.

In the most recent financial disclosures for Q3 2025, Microsoft's gaming revenue showed a 5% growth year-on-year. GamesIndustry.biz has sought further details from Xbox regarding these layoffs and will provide updates upon receiving additional insights.