Xbox Layoffs: What We Know About the Next Waves in 2026

Xbox is not done cutting. Content chief Matt Booty told staff in a September memo that the restructuring is "roughly three-quarters of the way through," and a new report says more rounds could land before the end of the fiscal year. This guide separates what Microsoft has confirmed from what is still reported by unnamed sources.

Quick summary

• Microsoft set a target of about 3,200 Xbox job cuts in July 2026.
• 268 more roles went on September 22, hitting Halo Studios and central teams.
• Fortune reports roughly 1,868 cuts so far, leaving about 1,330 to reach the target.
• Fortune also says three more waves are planned for October, November and January 2027. Microsoft has not confirmed that schedule.
• id Software's co-director says about half the studio left, yet insists the team is "doing great."

How many Xbox jobs have been cut so far?

Asha Sharma, who replaced Phil Spencer as head of Xbox in February, announced the July plan to remove around 3,200 roles through fiscal 2027. Per Fortune's reporting, as summarised by Game Authority News, about 1,868 people have been cut up to now. Simple subtraction leaves roughly 1,330 positions still to go. Booty's own "three-quarters" wording lines up closely with that maths, which is why the memo matters: it came from an executive, not an anonymous leak.

What changed on September 22?

The 268 cuts came with a wider reorganisation. Reports say the next Halo game moves to Activision, along with Rare and World's Edge. Obsidian shifts under Bethesda to co-develop a new Fallout title, and Playground Games and Turn 10 merge into one studio built around Forza and Fable. Microsoft's casual games arm moves under King, and UK studio Ninja Theory entered consultation over a possible closure. Earlier in the reset, Compulsion Games and Double Fine were spun out as independent studios.

Are more Xbox layoffs coming in November?

Probably, but the dates are unconfirmed. Fortune, citing people familiar with Microsoft's plans, says the remaining cuts will arrive in three waves: October, November and January 2027. GamesRadar and Eurogamer repeated that report rather than confirming it independently. German outlet 2Playerz, citing The Information, also says hundreds of employees could be let go as soon as this week. Treat the exact timing as a rumour. The fact that cuts continue is not in doubt, since Booty's memo says the work is unfinished.

What does it mean for id Software and Doom?

id Software lost around half its staff in the reset, according to co-director Marty Stratton, who spoke to IGN. The cuts reportedly landed 24 hours before the Doom: The Dark Ages expansion launched. Stratton said the studio is "doing great," that Microsoft made a deliberate effort to keep it able to build games and its engine tech, and that the team is working closely with MachineGames. The claim is his own and cannot be checked from outside.

Why is Microsoft cutting Xbox now?

Fortune puts Xbox's gaming profit margin at about 3%, far below rival platform holders. Two pressures stand out: Game Pass reportedly eating into full-price first-party sales, and rising memory prices that push up hardware costs. Our Xbox Q1 FY27 earnings breakdown covers the revenue side, and this wider squeeze also shows up in GPU and memory prices. The industry tracker maintained by Amir Satvat counted 10,977 game layoffs in 2026 through October 20, already above all of 2025's 9,197.

What should Xbox and PC players expect?

No game cancellations are confirmed in this latest round. Franchises Microsoft calls core, including Halo, Forza, Fable and Fallout, are being kept, while the number of separate studios shrinks. Check our launch calendar for dates that remain on track and our deals page for free games.

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