Xbox is reportedly poised to reveal a second wave of layoffs this week

Image credit: Xbox

Microsoft has announced that 268 positions have been eliminated as part of a substantial overhaul within its gaming studios, which may also involve closing Ninja Theory. Further layoffs are anticipated, with Xbox planning a second wave, according to reports from The Information. A part of this restructuring includes merging various game studios within the company.

Information from VGC indicates that the changes may affect Xbox Game Studios, Bethesda, Activision, and Blizzard either through mergers or internal realignments.

In a previous move announced in July, Xbox revealed its intention to reduce its workforce by 3,200 employees, initially cutting 1,600 jobs from entities such as Obsidian, Bethesda, Id Software, and Zenimax Online Studios. This also led to the divestiture of five internal studios: Compulsion Games, Double Fine Productions, Ninja Theory, Undead Labs, and Arkane. Compulsion Games and Double Fine have since become independent, while Ninja Theory and Undead Labs are being acquired. Arkane Lyon is in a consultation phase.

CEO Asha Sharma explained the restructuring was necessary as Xbox had extended itself too widely, making it difficult to focus on core objectives and resource allocation. Despite platform teams expanding by 40% since the start of the current hardware generation, both userbase and playtime have diminished. The restructuring plan includes limiting management layers to five to streamline operations.

Sharma emphasized this reorganization is aimed at future growth for Xbox, with the ambition of entertaining over a billion users daily and fostering creativity and connections.

Most recently, Xbox took over publishing for Kojima Productions' upcoming game, Physint, following Sony's withdrawal from the project. Sharma hailed this new collaboration with Kojima Productions as a significant milestone for the company.