Major Xbox Layoffs Expected Alongside Studio Closures and Project Cancellations
Xbox is reportedly preparing for a major shake-up with widespread layoffs affecting around 1,000 employees, multiple studio closures including Arkane Studios and Undead Labs, and cancellations of games like Marvel's Blade and State of Decay 3.
In recent months, there have been quite a few changes at Xbox that we've discussed extensively, and just when it seemed the company was finally getting back on track, we're now receiving reports of a massive shake-up coming soon. According to multiple reports, starting in the coming days we're expected to see widespread layoffs across Xbox studios alongside the cancellation of several games and even the closure of some studios. The current wave is somewhat reminiscent of what happened exactly a year ago when around 9,000 employees were laid off, but it appears this time the scale is smaller, with estimates of around 1,000 layoffs.
This wave of cuts is part of a reset at Xbox being carried out by Sarah Bond, the current CEO, as she re-examines the company's entire portfolio and the games it's working on. As of now, we know of 5 studios that are at risk of closure: Arkane Studios, which will apparently close following the cancellation of work on Marvel's Blade. Along with Blade, Microsoft wants to cancel State of Decay 3 as well, which will lead to the layoffs of around 110 developers at the studio working on it, Undead Labs, which is also at risk of closure. They join the studios Double Fine, Ninja Theory, and Compulsion Games, for which closure reports emerged two weeks ago.
But the problems don't end with Xbox's studios, as the company announced it's canceling development contracts it has with other companies. One that we know about now is IO Interactive, which announced layoffs following the cancellation of its publishing deal with Xbox for Project Fantasy. Despite this, IO said it's 100% committed to completing the game and launching it independently. This cancellation raised considerable concerns about the fate of OD that Kojima is working on, but as of now it appears it hasn't been affected by the changes and continues as planned.
In response to the extensive and painful changes Xbox is making, the company stated it's not retreating from gaming but rather changing focus, not scaling back. In an interview with Bloomberg, a representative from Xbox said: "We are not reducing our overall investment in games and we expect to invest a similar amount in content to what we invested last year. What's changing now is where we choose to invest that money and the type of projects we support, with the goal of refocusing on our highest priorities."