Xbox reportedly set to announce second round of layoffs this week

According to VGC, these changes may involve mergers or internal reorganizations within Xbox Game Studios, Bethesda, Activision, and Blizzard.

This follows significant workforce reductions announced earlier this year. In July, Xbox initially planned to lay off 3,200 employees. The first round resulted in 1,600 redundancies, impacting studios such as Obsidian, Bethesda, id Software, and Zenimax Online Studios. Additionally, the company divested five internal studios: Compulsion Games and Double Fine Productions became independent, Ninja Theory and Undead Labs are being acquired, and Arkane Lyon has entered a consultation process.

Xbox CEO Asha Sharma stated that the restructuring is necessary because the company has "simply spread itself too thin." She noted that while the company made numerous bets to grow, it lost focus on its core business. Sharma highlighted that platform teams have grown by 40% since the start of the current hardware generation, even as the player base and overall playtime have declined. To address fragmentation, the company plans to limit management layers to five, addressing instances where some teams had up to 14 layers.

Looking ahead, Sharma expressed confidence in a return to growth by 2027. Amidst the restructuring, the company also secured a significant partnership with Kojima Productions to publish the upcoming title Physint, after the developer was notified by Sony that it would be stepping away from the project.