🎮 Gaming Jul 6, 2026 · Kyle Orland

The incredible shrinking Xbox: Five studios, 3,200 employees let go

Ars Technica Gaming
Ars Technica gaming
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The incredible shrinking Xbox: Five studios, 3,200 employees let go
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Last month, Xbox executives laid out some "hard truths" about Microsoft's struggling gaming division that they said would require a difficult "Xbox reset." This morning, Microsoft revealed the brutal shape of that "reset," announcing plans for 3,200 layoffs and the divestment of five smaller studios that the company has spent years acquiring and shepherding.
Half of those 3,200 layoffs are effective today, new Xbox CEO Asha Sharma wrote, while the other half will come by the end of Microsoft's 2

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