Xbox is preparing to lay off “hundreds” of employees this week and consolidate “several” of its game studios, according to a report from The Information citing someone briefed on the plans (English day-of coverage via Gematsu, Polygon, Pure Xbox, and VGC). Microsoft has not issued an official confirmation as of this writing — treat the entire package as attributed reporting, not a done corporate announcement.
Second major FY27 cut — July context
In July, Xbox eliminated about 1,600 roles and divested five studios, while pledging toward roughly 3,200 total workforce reductions across the fiscal-year 2027 plan (Gematsu/Polygon framing of The Information + prior Xbox messaging). This week’s reported “hundreds” would be the second major staff reduction of that cycle. Exact headcount, business units, and timing inside the week remain unconfirmed beyond The Information’s “hundreds” / “this week” language.
Separately, Bloomberg’s Jason Schreier told the 8-4 Play podcast that layoffs at Blizzard Entertainment are “imminent” — Blizzard was widely described as spared in the July round. That is Schreier’s characterization, not a Microsoft press release.
Studio consolidation — names TBA; soft rumors only
The Information also says Xbox plans to consolidate several game studios. The report does not name which studios. Industry speculation (clearly labeled rumor, not confirmed by The Information’s sourced claim) includes talk that the Halo brand could move under Activision Blizzard (leaker NateTheHate via Polygon), and that Obsidian Entertainment could shift from Xbox Game Studios toward Bethesda. Treat both Halo→Activision and Obsidian→Bethesda lines as unconfirmed rumor/speculation only — do not present them as fact, and do not invent additional studio names or merger maps.
Polygon also notes Microsoft leadership has reportedly shelved carving out or selling Xbox in favor of supporting CEO Asha Sharma’s overhaul — again, reported industry context, not an official Microsoft statement in this wave.
