Microsoft continues Xbox layoffs, with jobs cut at King, Turn 10, ZeniMax Media, and more — read Phil Spencer's note to staff

As reported last week, Microsoft is again laying people off from its Xbox division, this time at mobile game developer King, with Bloomberg reporting that around 10% of the studio is being cut, or 200 jobs.

Bloomberg's Jason Schreier also reports that Rare's Everwild, which was first announced all the way back in 2019, is being canceled as part of the cuts. Windows Central can corroborate this closure, as well as confirm the closure of The Initiative and the cancelation of Perfect Dark.

Schreier also reports that around 50% of Forza Motorsport developer Turn 10 has been cut.

Sources also confirm to Windows Central that there are cuts to ZeniMax Media's marketing team in London, U.K. as well as Rockville, Maryland in the U.S, though the exact scale isn't known at this time. ZeniMax Online Studios' new IP is also being canceled, with an unknown number of staff being laid off.

Layoffs are also expected at some of the U.S. teams under the Xbox division, with details still unfolding. Microsoft confirmed the layoffs are part of a wider round of 9,000 employees targeted for a pink slip, with every division at the firm reportedly impacted.

Insider Gaming reports that multiple studios at Activision working on Call of Duty are also impacted, including Raven Software and Sledgehammer Games.

Phil Spencer's message to staff

An email sent to all Microsoft Gaming employees from CEO Phil Spencer was passed to Windows Central by an anonymous source. You can read the email below:

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.

Phil

Microsoft's gaming-focused layoffs continue

This is the fourth major round of layoffs at Microsoft Gaming in the last two years. The company first laid off around 1,900 employees in January 2024, mostly from Activision Blizzard King.

Following that, three ZeniMax Media studios were closed in May 2024, including Arkane Austin and Tango Gameworks, although the latter was purchased by PUBG owner Krafton and revived in a last-minute deal. Finally, another 650 employees were cut in September 2024, again mostly from Activision Blizzard King.