Xbox laying off a reported 9,000 additional staff has had a major impact. From game cancellations to studios being shuttered, here’s the full scope of the damage as we understand it.
With rumors swirling earlier in the week, Xbox confirmed its latest round of layoffs on July 2. Following the cut of over 12,500 roles throughout 2023-2024, Microsoft’s gaming division reportedly just wiped out a further 9,000 staff. This brings us to a total of over 20,000 redundancies since announcing plans to acquire Activision Blizzard King for $68.7 billion.
But just how far-reaching is this new set of job eliminations? From the cancellation of highly anticipated games to entire studios being closed, the impact has been significant.
Below is a comprehensive look at everything directly affected by Xbox’s latest round of layoffs.
Xbox has laid off over 20,000 staff in the past three years.
Perfect Dark reboot cancelled & The Initiative shuttered
Perfect Dark started out on the Nintendo 64 in the year 2000. Since then, it’s become one of the most hampered gaming franchises in recent history.
First announced in 2018, Microsoft formed a new studio called The Initiative with the sole purpose of rebooting Perfect Dark. In the seven years that followed, the team never released a game and has now been shuttered.
Going through a turbulent development, we saw multiple iterations of the Perfect Dark reboot over the years, though it wasn’t until a new look at the 2024 Xbox Games Showcase that The Initiative finally seemed to have found its rhythm. The trailer dazzled fans with its high-octane action and future-tech-infused combat.
While the reboot showed promise, it wasn’t meant to be. With the Initiative closing on July 2, 2025, all development on a new Perfect Dark has ceased. Rumors have now begun to claim the 2024 showing wasn’t real, that “none of [it] was gameplay,” but take these claims with a grain of salt.
Everwild cancelled
Announced all the way back in 2014, Everwild was set to be an innovative third-person game from Rare, the team behind the Banjo-Kazooie series and more recently, Sea of Thieves.
The game was formally revealed during Xbox’s 2019 showcase, however, it soon went dark. While various reports circulated, claiming the game had been rebooted internally, we never got another official look.
Despite Phil Spencer himself recently stating he was most excited for Everwild, among all of the first-party Xbox titles we know about, the game was scrapped as a result of the July 2025 layoffs.
We may never know for certain what happened throughout the 11-year span of this game’s development and the alleged overhauls.
Sea of Thieves & Banjo-Kazooie director leaves
Amid the layoffs, Video Games Chronicle reported that Gregg Mayles, veteran game designer and the director of Sea of Thieves and Banjo-Kazooie, to name a few, would be leaving the company as a result of Xbox’s decision.
With Everwild cancelled, Mayles is reportedly departing from the studio he’d been with for over 35 years. Mayles was credited as the director of the now-scrapped game, at least since its reported reboot in 2021.
New ZeniMax Online MMO shut down
Coinciding with news of the layoffs, Xbox Games Studio head Matt Booty confirmed the above game cancellations, along with binning off an unknown number of “unannounced projects.”
Windows Central reported one such project was an unrevealed MMO from ZeniMax Online Studios, the team behind The Elder Scrolls Online and Fallout 76.
Referred to as Project Blackbird, details were kept tightly under wraps on this project. Beyond falling in line with previous works as an RPG-oriented MMO, we know little else.
Shortly after news broke on this particular game, ZeniMax Studio Head Matt Firor announced his departure.
BethesdaAlthough Fallout 76 had a rocky launch, the game quickly rebounded and still receives regular content updates to this day.
Warcraft Rumble on last legs
2023 mobile game Warcraft Rumble is now ceasing development of any new content for the free-to-play release. Blizzard announced the pivot on the very same day news broke surrounding Xbox’s layoffs, claiming support will continue with “regular, systemic in-game events and bug fixes,” but that there will be no new content moving forward.
Aftermath soon reported that while some impacted staff will be able to transition to other roles under the Blizzard umbrella, others are being let go altogether. They claim this shift could impact up to 100 employees.
BlizzardWarcraft Rumble released in 2023 as a mobile-only tower defense game.
Uncertainty of remaining layoffs
While we’ve outlined the impact of the layoffs across teams with cancelled games, we haven’t yet touched on those that survived.
The Verge reported how Forza Motorsport developer, Turn 10 Studios, would be losing “more than 70 people” as part of the layoffs. This nearly halves the team, according to a headcount on LinkedIn.
CharlieIntel’s sources claimed multiple Call of Duty teams have been impacted, including Sledgehammer Games, Raven Software, and High Moon Studios. Meanwhile, there’s buzz around employees losing their jobs across the likes of Halo Studios and Undead Labs, creators of the State of Decay series, though these are yet to be confirmed.
Since the news broke, Engadget has reported how remaining staff have been impacted, one source inside Halo Studios claiming “there’s been a lot of tension.”
According to that same source, they alleged Microsoft is “trying their damndest to replace as many jobs as they can with AI agents.”
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