Xbox would be preparing a second layoff round and studio consolidation, Eurogamer reports
Eurogamer reports Microsoft may cut hundreds more Xbox jobs this week and merge multiple studios, according to The Information.
- The same report says Microsoft also wants to consolidate several Xbox studios, but it does not say which teams are involved.
- The new move would follow the July 2026 restructuring, when the article says 1,600 jobs were already cut.
What happened
Eurogamer says Microsoft is once again intervening in its gaming division. The publication is basing its report on The Information, which states that a second round of layoffs at Xbox could follow this week. Microsoft has not publicly confirmed those plans, so for now these are reported intentions rather than an officially announced reorganization.
Alongside the layoffs, Eurogamer reports that Microsoft wants to consolidate multiple Xbox studios. The source does not name any studios, so it remains unclear which teams would be merged or affected. In the reporting, the move is framed as part of a broader effort to make Xbox more profitable and to focus more heavily on the division’s biggest franchises.
If the information is accurate, this new round would be the second major intervention of 2026. Eurogamer links that to the July 2026 restructuring, when the article says 1,600 jobs were cut. In the same context, the publication also says Microsoft had previously indicated it wanted to cut another 1,600 jobs within about a year.
Timeline
July 2026 — According to Eurogamer, a major restructuring at Xbox leads to 1,600 job losses.
July 2026 — The article says several studios are affected, including Bethesda, ZeniMax Online, and id Software.
July 2026 — Eurogamer writes that Double Fine Productions and Compulsion Games bought back their independence after the shake-up.
July 2026 — According to the same article, Ninja Theory and Undead Labs were sold to unnamed buyers.
July 2026 — Arkane Lyon was still in consultation, with the outcome unknown at the time.
2026 — Eurogamer says Microsoft planned to cut another 1,600 jobs within about a year.
This week — The Information, as cited by Eurogamer, reports that Microsoft is preparing a second layoff round with hundreds of possible job cuts.
This week — Microsoft would also be looking to merge multiple Xbox studios.
This week — The report does not name the studios that may be consolidated or affected.
Background
In Eurogamer’s background section, Xbox CEO Asha Sharma is described as the driving force behind Microsoft’s renewed push to reshape its games business. The article says Sharma had previously indicated that Microsoft wanted to cut another 1,600 jobs within about a year. The publication also says Microsoft wants to focus more on its biggest franchises, including The Elder Scrolls and Fallout.
The earlier July 2026 restructuring reportedly affected Bethesda, ZeniMax Online, and id Software, among others. Eurogamer also says Double Fine Productions and Compulsion Games bought back their independence, while Ninja Theory and Undead Labs were sold to unnamed buyers. Arkane Lyon was still in consultation, and the outcome was unknown at the time of the article.
Because Microsoft has not confirmed the new plans, it remains unclear whether the expected second round will follow the exact same structure as the July move. It is also still unknown which studios may be merged, and whether that would involve a formal sale, a spin-off, or an internal reorganization.