Xbox is reportedly gearing up for three more rounds of layoffs as the Microsoft gaming division continues CEO Asha Sharma’s plan to reset the business. According to a new report, the first of these is taking place this month, followed by another in November and one in January 2027.
That’s according to “people familiar with the plans”, who revealed that to Fortune Magazine in a new report which also featured a profile of Sharma. Plans could change, however, the people said.
If true, this would be the second round in as many months, following September’s round which saw the elimination of 268 roles alongside organisational changes that moved Obsidian under Bethesda, with Rare and World’s Edge joining Activision.
Those layoffs are part of what’s considered the second major wave in Xbox’s larger plan to cut costs and return the division to profitability. The first wave was the largest by far. It took place in July and saw over 1,600 job cuts. The remaining 1,600 are planned to be distributed across future quarters, culminating in the early months of 2027.
Thanks to this latest report, we now know when those remaining cuts will occur. The report does not offer any information on which teams are in Sharma’s crosshairs, considering the massive cuts that already took place at its largest and most iconic studios.
One of the biggest remaining question marks, however, surrounds the fate of Gears of War: E-Day studio The Coalition. The Canadian first-party studio just released the third-person shooter to what appears to be softer than anticipated sales.
Eurogamer spoke to members of The Coalition’s development team as they were preparing to release E-Day, and it’s clear there’s widespread worry Xbox will reduce staff at the studio now that their latest project has shipped. Many also fear the cuts could be timed in such a way to prevent those potentially getting laid off from receiving promised bonuses.
We’re well over halfway through October, so if the information is accurate, the bad news is likely to be announced this week or next. The same report also revealed that Xbox is internally estimating next-gen Helix consoles to cost between $1,200 and $1,800.
