Unionized Xbox Workers Demand Job Security Ahead of Expected Microsoft Gaming Cuts

Unionized Xbox employees are demanding layoff protections as reports surface of a major workforce reduction in Microsoft's gaming division. Members of the Communications Workers of America (CWA) are calling for immediate negotiations, citing rumors that sweeping job cuts will be finalized by the end of Microsoft's fiscal year on June 30.

Earlier this month, Bloomberg's Jason Schreier described the anticipated Xbox layoffs as a potential "bloodbath," with studio closures and job losses that would punish developers for following Microsoft's directives. Speculation about staff redundancies and studio shutdowns has intensified following a warning from newly appointed Xbox CEO Asha Sharma that the console maker's thin profit margins are unsustainable.

Reports suggest that studios like Compulsion Games (South of Midnight), Double Fine (Kiln and Keeper), and Ninja Theory (Hellblade) are among those at risk, though details remain unconfirmed. It has been alleged that Microsoft announced Ninja Theory's new game, Senua, at the Xbox Games Showcase while knowing it planned to close the studio, hoping the announcement would attract investor interest. There are now concerns that Senua may never be released.

IGN has reached out to Microsoft for comment but has not received a response.

In July 2025, Microsoft laid off 9,000 employees from its gaming division, canceling games like Rare's Everwild and shutting down studios such as The Initiative (Perfect Dark). Remaining Xbox staff are now bracing for a repeat scenario just a year later.

"Across Xbox, more than 3,500 workers have chosen to form unions with CWA since 2022, following Microsoft's agreement to a neutrality framework that allowed workers to make that choice freely, without fear of retaliation or coercion," the CWA said in a press release.

It remains unclear what the CWA can do to prevent the cuts. Microsoft's gaming business includes numerous first-party studios (Halo, Gears of War, Forza Horizon) as well as Bethesda (The Elder Scrolls, Fallout), Activision Blizzard (Call of Duty, Diablo, World of Warcraft), and mobile hits like Candy Crush and Minecraft.

A recent report from The Information (via Reuters) claims Sharma is accelerating development on new Elder Scrolls, Fallout, and Halo games as she prepares to reset the business. The report also suggests Microsoft hasn't ruled out turning Xbox into a wholly-owned subsidiary, operating it as a joint venture with partners, or even selling the brand.