Heads are truly rolling at Xbox right now. New Xbox chief Asha Sharma has announced what she calls the “most significant overhaul” in the division’s history — and the cuts are severe: Approximately 3,200 positions will be eliminated, representing about 20 percent of the entire Xbox workforce. Around 1,600 jobs are affected immediately, with the remainder phased out until June 30, 2027.
Sharma cites the economic viability of their internal studios as the reason, stating that they operate with margins three to ten times lower than those in comparable platform and publishing businesses. Specifically, this means the end for four studios as part of Xbox: Ninja Theory, Undead Labs, Compulsion Games, and Double Fine Productions will be sold or spun off. Together, these four teams account for approximately 350 jobs.
Double Fine and Compulsion Games are expected to continue operating completely independently and retain their own brands. Ninja Theory and Undead Labs, however, will go to new owners who, according to the announcement, are expected to ensure continued funding for projects such as a potential sequel to Senua and of State of Decay 3. What this means in detail for ongoing projects, however, is currently still unclear.
Industry reactions have been appropriately critical. Reports suggest that the workforce at id Software is set to shrink by up to half, and the team behind The Elder Scrolls Online could be cut by up to 50 percent. Many employees in the Activision-Blizzard division are still awaiting clarity regarding their situation. Some observers are now even openly speculating whether Xbox could eventually be spun off from Microsoft as an independent entity in the long term.
For the player community, the primary concern remains uncertainty: Which games and studios will ultimately benefit — or lose out — will likely only become clear in the coming months.
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