Microsoft Xbox layoffs June 2025 – tracking the situation as it happens

Yesterday, as widely expected based on earlier reports, Microsoft began another sweeping round of layoffs – its fourth in just 18 months – this time affecting thousands of people across the company. It’s believed more than 9,000 employees have lost their jobs as a result of this most recent move, which Microsoft told Eurogamer were “necessary to position the company and teams for success in a dynamic marketplace.”

Since the announcement, additional reports have surfaced painting a clearer picture of the devastation wrought by Microsoft’s latest cost cutting measures, as well as the substantial impact on its Xbox division. Beyond the significant human cost of the move – which Xbox boss Phil Spencer insisted was necessary to ensure the “enduring success” of the company in a message to staff yesterday – further details on the specific studios and projects impacted have now begun to emerge.

Rare’s fantasy adventure Everwild, first announced in 2019, has reportedly been cancelled, for instance, leading to the departure of studio veteran Gregg Mayles after 35 years. Microsoft’s troubled Perfect Dark reboot, unveiled in 2020, has reportedly also ceased production and its first party developer, The Initiative, closed. Microsoft is also said to have terminated its partnership with Crystal Dynamics, which was called in to help on the beleaguered project back in 2022, raising questions around how that team may also have been impacted by yesterday’s news.

Elsewhere, an unannounced ZeniMax MMO has reportedly been cancelled, while 200 people are said to have lost their jobs at the Microsoft-owned Candy Crush maker King, and nearly 50 percent of staff at Forza Motorsport developer Turn 10 have reportedly been laid off. The full extent and impact of Microsoft’s massive “organisational and workforce changes” are yet to become clear, with Microsoft only providing limited information to press. It has, however, moved swiftly to deny rumours of Phil Spencer’s imminent retirement, insisting the Xbox boss won’t be retiring from his position “anytime soon”.

With fresh reports continuing to surface around yesterday’s bombshell announcement and its impact on Xbox, we’ve set up this rolling news blog to sift through the confusion, and to collate breaking news and industry reactions as the story continues to evolve.