Despite the massive wave of layoffs already having occurred in Microsoft's gaming division, the remaining Xbox employees should not relax yet. According to Bloomberg journalist Jason Schreier, the company plans to continue layoffs throughout the 2027 fiscal year, creating a tense atmosphere within the team.
Schreier reports that the anticipation of a new wave of layoffs has caused "panic and anxiety" among employees. Even in divisions that were largely unaffected by recent cuts, such as Blizzard, employees do not feel safe.
An additional source of stress has been the lack of information about when exactly the next round of layoffs will take place. According to Schreier, the remaining developers are forced to do more work with fewer resources, fearing that insufficient productivity could be a reason for their dismissal in the future.
In addition to cuts within Xbox, Microsoft has also slashed its budget for contractor services by 50%, leading to layoffs at third-party agencies collaborating with the company. This has become another consequence of the large-scale restructuring of the gaming business.
As for individual studios, French Arkane Studios is undergoing mandatory consultations with employees in accordance with local legislation. At the same time, Swedish MachineGames has reportedly avoided serious consequences. However, the cuts have affected Xbox's publishing divisions and a number of other internal studios, although Microsoft has not yet disclosed the full list of affected teams.
Xbox faces a major business overhaul ahead. One of the company's key initiatives is considered to be the next generation of gaming devices, known by the codename Project Helix. However, it remains an open question whether the current reforms will help Xbox maintain its market position and implement the company's long-term plans.