Microsoft is preparing to implement another round of job cuts within its Xbox gaming division, continuing its cost-cutting efforts into the next fiscal year.
The latest layoffs are expected to be announced in early July 2025 and will affect teams across multiple departments, including hardware, software, and support operations.
Fourth major Xbox restructure in 18 Months
According to a report by Bloomberg published on 24 June 2025, this marks the fourth significant wave of layoffs within Microsoft's gaming business in just 18 months.
The upcoming cuts are expected to affect several areas of the Xbox team, including central operations in Europe, as part of a broader internal reorganization.
These latest changes follow Microsoft's earlier layoff announcements:
- January 2024: Around 1,900 employees were laid off from Xbox and Activision Blizzard after the merger.
- May 2024: Microsoft closed several game studios, including Arkane Austin and Tango Gameworks.
- September 2024: Approximately 650 additional Xbox and support staff were let go.
- May 2025: Microsoft announced over 6,000 job cuts across multiple divisions, including gaming.
The cumulative impact has reshaped Xbox’s internal structure significantly, with a clear shift in focus towards core profitability and streamlined operations.
Impact of the Activision Blizzard acquisition
The restructuring comes in the wake of Microsoft’s RM329 billion (USD70 billion) acquisition of Activision Blizzard. As the integration of the two companies continues, Microsoft appears to be realigning resources to consolidate overlapping functions and reduce operational costs.
Despite the layoffs, Microsoft’s gaming division remains profitable. Xbox revenues have grown steadily, bolstered by subscription services like Xbox Game Pass and ongoing hardware partnerships.
The company is also investing in new technologies, including cloud gaming and artificial intelligence integrations.
What’s next for Xbox?
Microsoft is reportedly exploring a closer alignment between Xbox and the Windows ecosystem. Analysts suggest future Xbox hardware may share more components with PC architecture to simplify development and reduce production costs.
Additionally, Microsoft has recently partnered with AMD on next-generation console innovations and launched the ROG Ally handheld gaming device through a collaboration with Asus—indicating that hardware remains part of its long-term strategy.
Are you concerned about the future of Xbox in light of these changes? While Microsoft continues to grow its gaming revenue, the ongoing layoffs show a clear focus on streamlining operations.
Could this mean fewer in-house titles or more Windows-like integration in future Xbox consoles? Let us know your thoughts.
Stay tuned to TechNave.com for more updates.
COMMENTS