With Microsoft’s fiscal year ending today, the company is reportedly going ahead with its plans for mass layoffs and studio closures across its Xbox division. According to co-founder of 3D Realms and Apogee, George Broussard, the company is expected to finalize its decisions today, with the job cuts officially kicking off on July 6th.
Lending further credence to the report, Broussard also made note of the fact that Microsoft has done mass layoffs in the past, pointing to company-wide layoffs affecting around 9,000 jobs in July 2025.
In a follow-up post, Broussard has indicated that these new layoffs are going to be massive. Alluding to a list of studio closures that he hasn’t disclosed, he has said that “this will likely be the largest single layoff event in gaming history.” Studios that aren’t getting shut down are also expected to face quite a few job cuts.
“I just got word of a list of Xbox studio closures (no, not posting them),” he wrote. “If it’s even close to true (and it’s from inside), this will likely be the largest single layoff event in gaming history. Xbox is going to be supremely unpopular for a very long time, and the devastation is going to reverberate like the meteor that took out the dinosaurs. On top of all that, there will also be layoffs at the studios that remain.”
Recent reports have indicated that even State of Decay 3 developer Undead Labs wasn’t going to be safe from these closures. Despite having showcased gameplay from the zombie survival title earlier this month, Xbox has seemingly decided that the studio will join others like Compulsion Games, Double Fine, and Ninja Theory on the chopping block.
The report has indicated that there will be around 435 layoffs from across these studios, along with “percentage layoffs” at larger companies under Xbox, like Blizzard Entertainment and Bethesda.
Ahead of these impending layoffs and studio closures, which have been described by some as a “bloodbath”, former Xbox employees have warned those currently still working at the company about potential retaliation from the leadership teams at various studios. Former art director at Halo Studios, Glenn Israel, along with three other former Xbox employees who wished to remain anonymous, noted that Microsoft’s studios have a culture of poor treatment of subordinates by leadership and retaliation against those who speak out against this poor treatment.
“Make yourself aware of state and federal statutes of limitations for reporting such actions to relevant regulatory organizations, which vary from 60 to 300 days by location,” warned Israel. “If you are laid off, consult an attorney before signing anything and, at the very least, secure a document retention agreement.”
Reports have indicated that Compulsion Games, known for We Happy Few and South of Midnight, has already been hit by “mass layoffs”, with many now-former employees taking to LinkedIn to reveal that they had been let go. Industry journalist Jason Schreier, in a video about the state of Xbox, said that the company is essentially punishing its development teams for following orders that were given to them by Microsoft.
