Xbox Plans Hundreds More Layoffs and Studio Consolidations This Week [2026 Update]

As originally reported by Rock Paper Shotgun, Microsoft's Xbox division is preparing a second significant round of layoffs in 2024, with hundreds of additional staff expected to lose their positions this week alongside the consolidation of several game studios under the Xbox umbrella. This follows the July restructuring that eliminated approximately 1,600 roles and saw Microsoft part ways with multiple studios entirely. The scale of these repeated cuts points to a fundamental strategic realignment within Xbox Game Studios rather than isolated cost-trimming. Microsoft's gaming division, which expanded dramatically through the $68.7 billion Activision Blizzard acquisition, appears to be rationalizing its sprawling portfolio of development teams. The consolidation approach suggests certain studios may be merged or folded into larger entities rather than shuttered outright, though the human cost remains severe. This pattern of rolling layoffs across the gaming industry—affecting publishers from EA to Riot Games—reflects broader macroeconomic pressures on AAA development budgets. As , industry-wide workforce instability has become a defining narrative of 2024's gaming landscape.