Sources cited by Windows Central’s Jez Corden indicate the final total will land lower than announced. Rather than pushing through the full cut, Microsoft is opting to restructure and move some employees into different roles across the company.
How Restructuring Softened the Numbers
Part of Microsoft’s revised strategy involves shifting employees to other departments instead of cutting them loose entirely. The company is also pursuing divestitures, spinning some studios back out as independent operations rather than absorbing the cuts directly.
Double Fine and Compulsion are among the studios returning to independent status. Undead Labs, currently developing State of Decay 3, is reportedly making a similar move. Each of these divestitures chips away at the original layoff count without technically counting as a reversal.
Halo Studios and Other Teams Still Hit Hard
Even with the lower total, thousands of employees across Microsoft’s gaming division remain affected. Recent layoffs hit Halo Studios particularly hard, and the Halo franchise is reportedly shifting to Activision’s stewardship going forward.
- The Coalition
- World’s Edge
- Treyarch
- General Xbox Game Studios staff
Each of these teams has absorbed cuts as part of the broader restructuring, even as the overall headline number shrinks.
Booty Says More Changes Are Coming
Xbox’s chief content officer, Matt Booty, confirmed further changes are still on the way. In a memo to staff, Booty said the company is roughly three quarters of the way through
its planned restructuring, meaning more organizational shifts are likely before this process wraps up.
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