Microsoft has cut roughly 4% of its workforce, or around 9,000 jobs, in its second round of layoffs in 2025, with Xbox among the many divisions impacted.
According to reports online, Call of Duty studios are among the many Xbox-partnered studios affected by Microsoft’s largest round of layoffs in more than two years.
The tech giant reportedly sent out layoff notices to multiple divisions, including Xbox, on Wednesday. According to Insider Gaming, Phil Spencer, Xbox CEO, wrote in a memo to employees that the layoffs were ‘removing layers of management’ and aimed to ensure ‘enduring success’ and ‘focus on strategic growth areas.’
In light of the layoffs, employees have shared news of their departure from Microsoft and Xbox online. Though Microsoft has yet to publicly announce news of the layoffs on its socials, it confirmed to Reuters that Xbox would be affected.
Game Cancellations
Several games have reportedly been cancelled as a result of the layoffs, such as Perfect Dark, Everwild, and an unrevealed MMO from the developers behind The Elder Scrolls Online. According to Insider Gaming, the popular first-person shooter and esports franchise, Call of Duty, has also been impacted by this round of layoffs.
The layoffs allegedly include Raven Software, which is currently working with Treyarch on the upcoming Black Ops 7 title. Moreover, Sledgehammer Games has also reportedly been affected.
According to Bloomberg, other studios behind competitive franchises such as Halo Studios and Forza Motorsport developer Turn 10 Studios have reportedly faced workforce reductions. The extent of these layoffs has not been made public.
Microsoft previously had more than 228,000 full-time employees in its last headcount on June 2024. However, this round of layoffs marks the largest to hit the tech giant since 2023, when it laid off 10,000 employees. In January 2024 Microsoft laid off 1900 employees after it acquired Activision Blizzard.
