Microsoft is undergoing one of its biggest corporate shake-ups yet, with around 9,000 employees laid off globally. This includes the Xbox gaming division, which has taken a major hit. The company confirmed that several high-profile titles have been cancelled, and studios under the Xbox Game Studios umbrella are being restructured or shut down.

The layoffs affect about 4% of Microsoft’s total workforce, but the impact has especially hit the gaming division hard. This marks the fourth round of major layoffs in just 18 months. It clearly shows that the company is undergoing serious restructuring, despite its continued expansion in gaming, including last year’s massive acquisition of Activision Blizzard.

Xbox

In an internal email from Matt Booty, head of Xbox Game Studios, the company confirmed that it is shutting down the studio behind the highly anticipated Perfect Dark reboot. This was followed by Microsoft confirming the cancellation of two major titles: Perfect Dark and Everwild.

Talking more about these games, Perfect Dark was set to be a reboot of the cult-classic FPS franchise, originally revived in 2018. It was meant to be a major tentpole exclusive for Xbox, bringing spy-themed action paired with next-gen visuals.

On the other hand, Everwild was a highly ambitious fantasy adventure being developed by Rare Studios. Its cancellation, along with Perfect Dark, is a major blow for gamers, especially those who own an Xbox and were looking forward to these promising titles.

Other Studios Hit

The layoffs have extended well beyond just the cancelled titles. ZeniMax Online Studios, the creators of Elder Scrolls Online, have reportedly cancelled a new MMORPG codenamed Blackbird. Even Turn 10 Studios, the team behind the hugely popular Forza Horizon series, has reportedly laid off around 70 employees.

This wave of layoffs and cancellations underscores a shift in strategy at Microsoft Gaming. With Xbox aiming to become a more prominent force in handheld gaming, these cuts could be a major hit for the platform. It suggests that Microsoft is consolidating its resources and refocusing on fewer, but higher-priority projects.