Xbox plans second wave of 1,600 job cuts, report says
Microsoft is preparing to cut about 1,600 jobs from Xbox, completing a planned reduction of 3,200 roles across its gaming division.
The second wave is expected to start in the week beginning 21 September 2026, according to a report from The Information citing a Microsoft source and published 21 September 2026. The report describes it as Xbox's second major staff reduction of 2026. It also says Microsoft will consolidate several game studios as part of a wider restructure.
The first 1,600 roles were cut in July. Xbox staff were told that month by chief executive Asha Sharma that a further 1,600 roles would go by the end of 2026. That would bring the total to 3,200.
Xbox confirmed the scale of the plan in a statement titled "Resetting Xbox" published 6 July 2026. The company said it would reduce its team by approximately 3,200 roles throughout its 2027 financial year. Reuters reported that the 1,600 Xbox cuts made on 6 July 2026 formed part of a broader Microsoft restructuring involving about 4,800 jobs across the company.
Sharma, who is chief executive of Xbox, is seeking to improve margins while focussing development on major franchises, according to Pocket Gamer. GameSpot reported, in an article published 22 September 2026, that the plan amounts to about 20% of the Xbox workforce.
The same report pointed to sharp changes to Xbox's organisation, meaning the structure of the studios it owns. It said Double Fine Productions and Compulsion Games have left Xbox to become independent studios again. It said Undead Labs and Ninja Theory have been sold off.
It also said Arkane Lyon, the French studio behind Dishonored and Deathloop, is looking to separate from Microsoft after a mandatory consultation period with the French Local Works Council. That process is required under French labour law before certain workplace changes can proceed.
A separate claim from leaker NateTheHate that the Halo franchise will move to Activision Blizzard as part of the reorganisation was noted in the coverage. That remains a leak, not a confirmed company decision. Microsoft has not announced a change of stewardship for the series.
The July cuts had been foreshadowed. Bloomberg News reported on 10 June 2026 that Xbox was planning major layoffs the next month, alongside cuts to marketing and other budgets.
