Microsoft has commenced a sweeping round of layoffs affecting its gaming division, including Xbox studios, with early reports suggesting that multiple projects have already been canceled as a result. The layoffs, formally communicated to employees on Wednesday, have fueled industry speculation and concern regarding the future of several in-development titles.
According to reporting from VGC, Rare’s Everwild, a project reportedly in development for over a decade, has been canceled following the news of restructuring. Individuals with knowledge of the project indicated that team members were informed of the decision as part of a wider reorganization at Rare, the studio behind Sea of Thieves.
Similarly, Bloomberg’s Jason Schreier revealed that another unannounced new intellectual property from Zenimax Online, best known for Elder Scrolls Online, is also believed to have been canceled. Schreier noted that the extent of the layoffs has yet to be fully measured, stating, “The full scale of today’s Xbox layoff is not yet clear, but you can expect more news of project cancelations and job cuts as the U.S. west coast wakes up. Some studios are planning meetings within the next two hours.”
Update: It seems that Perfect Dark is yet another project that has been shelved, and the studio, The Initiative, has been shut down.
In parallel, Microsoft’s Barcelona-based King division, responsible for Candy Crush, is cutting around 10 percent of its staff, or roughly 200 roles, according to people familiar with the matter. Reports indicate that other European offices, including Zenimax, have also begun informing their employees of reductions. In the United States, staff were expected to be briefed later on Wednesday about the scale of workforce impacts at each location. Microsoft’s gaming division was estimated to have around 20000 employees as of January 2024.
The layoffs had been anticipated since May, when Microsoft launched broader companywide staff reductions, and speculation had been mounting that Xbox teams could face significant cuts. Employees began to brace for the worst following a Bloomberg report last week suggesting job losses were imminent.
Further highlighting the uncertain climate, industry insider NateTheHate remarked, “Tons of chatter behind the scenes right now and a lot of it sounds awful. Working to get confirmation on some, as the info I have is incomplete.”
Microsoft has indicated that it will provide additional announcements and clarifications in the days ahead regarding the future of its Xbox division, including which projects and studios may be affected long-term. The restructuring highlights the volatile conditions facing the gaming industry and the tough decisions major platform holders must make to adapt to changing economic realities.
