A new wave of layoffs is hitting several companies under the Microsoft umbrella. Unfortunately, in recent years, we have witnessed a notable increase in layoffs in the video game industry, regardless of whether the financial situation justifies it. Corporatism is gaining more and more power, leaving employees in an increasingly alarming state of defenselessness. Companies no longer need to go through a rough patch to leave countless people out on the street. Nowadays, the unbridled greed of their executives to collect their hefty bonuses is enough for hundreds or thousands of people to lose their jobs under poor excuses.
The situation has continued to worsen over the years. To give us an idea, in 2022, the video game industry recorded more than 8,500 layoffs across all companies, and that’s not counting cases where there are no official figures, which would significantly increase the final number. In 2023, the number of layoffs rose to more than 10,500; in 2024, it exceeded 14,600; and so far in 2025, more than 4,000 have already been recorded. This information can be verified on websites like Gaming Layoffs or Game Industry Layoffs, which are dedicated to compiling all the layoffs taking place in the industry.
Obviously, Microsoft is not the only company in the sector wielding the axe of cuts whenever some bigwig wants to upgrade their private jet, but it is one of the companies that has laid off the most workers, despite being one of the most powerful in the sector. So far this year, Microsoft’s Gaming Division has laid off more than 604 employees, and this is an approximation since out of the 11 companies that have suffered cuts, official data has only been provided for 5. A rather worrying number, but one that for now improves on last year’s massacre, where more than 2,800 people lost their jobs, the most notable case being the “restructuring” of Activision Blizzard King, which left 1,900 people out on the street in one fell swoop. And these numbers only take into account the company’s video game division. If we count all areas and divisions within Microsoft, more than 15,000 jobs have been cut in 2025 alone, as reported by renowned journalist Jez Corden in Windows Central.
Which companies are affected by the latest layoffs at Microsoft?
- Rare Ltd: number of layoffs unconfirmed.
- Xbox: number of layoffs unconfirmed.
- Sledgehammer Games: number of layoffs unconfirmed.
- Raven Software: 20 layoffs confirmed.
- Halo Studios: number of layoffs unconfirmed.
- Blizzard Entertainment: at least 100 layoffs.
- The Initiative: at least 50 layoffs.
- Turn10 Studios: at least 70 layoffs.
- Bethesda Softworks: number of layoffs unconfirmed.
- ZeniMax Online: 164 layoffs confirmed.
- King: 200 layoffs confirmed.
The message from the Xbox CEO following the layoffs
As the new wave of layoffs within Microsoft was made public, the outlet Insider Gaming received an internal communication that the company’s CEO, Phil Spencer, sent to his employees via email. The specialized outlet quickly echoed the news and published an article with the content of this memorandum.
Today we are sharing decisions that will impact colleagues across our organization. To position gaming for long-term success and allow us to focus on strategic growth areas, we will end or reduce work in certain areas of the business and follow Microsoft’s lead in eliminating layers of management to increase agility and effectiveness. Out of respect for those affected today, the specific details of today’s notifications and any organizational changes will be shared by team leaders in the coming days.
I recognize that these changes come at a time when we have more players, games, and hours of gameplay than ever before. Our platform, hardware, and game roadmap have never been stronger. The success we are currently seeing is based on difficult decisions we have made in the past. We must make decisions now to ensure continued success in the coming years, and a key part of that strategy is the discipline to prioritize the strongest opportunities. We will protect what is thriving and focus efforts on areas with the greatest potential while meeting the company’s expectations for our business. This focused approach means we can deliver exceptional games and experiences for players for generations.
Prioritizing our opportunities is essential, but that does not diminish the importance of this moment. Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are affected. These decisions do not reflect the talent, creativity, and dedication of the people involved. Our momentum is no accident; it is the result of years of dedicated effort by our teams.
Human Resources is working directly with affected employees to provide severance plan benefits (aligned with local laws), including pay, healthcare coverage, and job placement resources to support their transition. Employees whose roles were eliminated are encouraged to explore open positions in Microsoft Gaming, where their applications will receive priority review.
Thank you to everyone who has shaped our culture, our products, and our community. We will move forward with deep appreciation and respect for all who have contributed to this journey.
What can we take away from Phil Spencer’s statement?
First, that Microsoft’s gaming division is at its best moment. However, they have no hesitation in leaving thousands of people out on the street while attempting, unsuccessfully, to justify it with vague excuses wrapped in corporatist jargon. Second, that greed knows no limits. If, at their best moment and with tons of projects in development, they lay off so many people, I don’t want to imagine what would happen in lean times.
The level of hypocrisy from Microsoft is remarkable, but of course, it’s not the first time. I think it’s a good time to recall what happened last year with the Tango Gameworks studio (among many others). Before closing the studio, Xbox’s top corporate leadership mentioned how important it was for them to achieve games that not only achieve great sales but also win awards and public recognition. Tango Gameworks gave them exactly that with Hi-Fi Rush, a game awarded at multiple events and loved by the public. The result? Xbox decides to close the studio.
Gone are the days when what really mattered were sales. Now, the only thing that matters is seducing investors, those leeches of the financial system that are poisoning the video game industry, just as they have done with everything they’ve touched since forever.
