By Lloyd Coombes
In recent weeks, Xbox has held its showcase event , revealed its own Xbox-branded ASUS handheld , and launched a surprise collaboration with Meta for a VR headset . All of that is on top of Xbox having “more players, games, and gaming hours than ever before” according to Microsoft Gaming CEO Phil Spencer. Why do we mention that? Because despite all of this, Microsoft announced mass layoffs yesterday that will cut 4% of its staff across the globe (that’s around 9,000 people). While it’s not only Xbox that’s been affected, it has sent shockwaves through the games industry as projects are cancelled and entire studios are shuttered. It begs the question that if a trillion dollar company can’t look after the creatives that make its games, what hope does the industry have? Here’s all we know so far. Here are the studios affected by the layoffs: Microsoft founded The Initiative for ‘AAAA’ game development, but the studio has been closed without releasing its only project: the Perfect Dark The Call of Duty studio has been hit by cuts, despite 2025’s Black Ops 7 still to launch. The studio is also behind Warzone. High Moon Studios, a co-developer of Warzone and other Call of Duty titles, has also been affected. Sledgehammer Games has also seen layoffs. The veteran studio behind Forza Motorsport (not Horizon) has lost almost half of its staff. One of Microsoft’s oldest studios has seen significant layoffs, and its long-in-development project, Everwild, has been cancelled. The team behind Elder Scrolls Online has lost a number of staff, and its new MMO that was codenamed Blackbird has been canceled. Blizzard was hit by layoffs, too, notably around Warcraft Rumble. The mobile game will only get “systemic” events and bug fixes going forward, with as many as 100 people affected. Here’s Spencer’s statement in full: “Today we are sharing decisions that will impact colleagues across our organization. To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organizational shifts will be shared by your team leaders in the coming days.” “I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger. The success we’re seeing currently is based on tough decisions we’ve made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities. We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come.” “Prioritizing our opportunities is essential, but that does not lessen the significance of this moment. Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted. These decisions are not a reflection of the talent, creativity, and dedication of the people involved. Our momentum is not accidental—it is the result of years of dedicated effort from our teams.” “HR is working directly with impacted 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 across Microsoft Gaming, where their applications will be given 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.” For the latest breaking news and stories from across the globe from the Daily Star, sign up for our newsletters .