It’s Official: Xbox is parting ways with 5 studios as nearly 5000 jobs are cut at Microsoft

For the past month or so, we’ve been hearing countless talk surrounding Microsoft and its plans for Xbox, with leaks and rumours suggesting that studios could be shut down, games might be cancelled and Xbox overall could be in a very different place. Finally, Microsoft has broken its silence, confirming that nearly 5000 jobs across the company will be cut, with the likes of Double Fine and Compulsion Games now going independent.

As obtained by the publication The Verge (paywalled), Xbox CEO Asha Sharma recently sent a memo to employees addressing all of the rumours and giving a concrete idea of what’s in store for Xbox, writing:

“We are beginning the most significant restructure in XBOX history. After careful consideration, I’ve made the difficult decision to reduce our team by approximately 3,200 throughout FY27. This will include approximately 1,600 role eliminations today.”

In terms of what will become of Xbox’s many studios, Sharma finally offered clarity, adding: “Compulsion Games and Double Fine Productions will return to management and transition to independent studios with their IP, catalog, and runway for their next games.”

Other studios are set to be impacted differently, with Sharma revealing that “Ninja Theory and Undead Labs have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3. In France, Arkane’s management is beginning required consultation with its Works Council to review potential strategic options.”

The full memo is rather lengthy, and covers all manner of topics from Xbox’s current business costs, the structure of the company, new appointees and more. Regardless, while this latest news is far from positive, it could have been even worse.

Hopefully Double Fine, Compulsion, Undead Labs, Ninja Theory and Arkane are all able to thrive under these new conditions.

KitGuru says: What do you think of this latest decision? Is it the best-case-scenario given the circumstances? Let us know down below.

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