Xbox plans to cut 3,200 jobs as it prepares to divest five of its studios

As part of its strategic revision, Xbox has announced significant staff reductions, totaling 3,200 jobs, with 1,600 positions being cut immediately.

The company also revealed plans to spin off five of its studios. This move impacts studios such as Compulsion Games, Double Fine, Ninja Theory, Undead Labs, and Arkane.

Compulsion Games and Double Fine are set to become standalone studios, while negotiations are underway for Ninja Theory and Undead Labs to find new owners and funding sources to advance projects like Senua and State of Decay 3.

Arkane is exploring potential strategic moves in its operations in France.

Additional staff reductions will affect other divisions, including Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios.

CEO Asha Sharma has assured that the reset will not result in the cancellation of any publicly announced first-party games.

The rapid expansion of Xbox's portfolio since 2018 was highlighted by Sharma, noting that the volume of games being created monthly now surpasses the output of the past decade.

Sharma stated, "We compete not only with major publishers but also with smaller indie studios. It's not feasible to acquire every successful studio. Additionally, we've recognized that not every studio fits well within our structure, as evidenced by a financial loss of 64 cents on each dollar invested in a typical year."

"In our efforts to restructure Xbox, we aim to support indie creators by offering them open development tools and platforms to showcase their projects."

Updates on this developing story will follow.