Xbox Game Cancellations Amid Microsoft Layoffs

Microsoft announced mass layoffs on July 2, impacting many areas of the company’s sprawling business, including Xbox. Overall, Microsoft is said to be cutting 4% of its staff worldwide, affecting about 9,000 people. Microsoft is an enormous company that employs more than 200,000 people globally.

The exact number of cuts at Xbox is unknown, but Microsoft has confirmed layoffs at multiple studios, game cancellations, and entire studio closures. Read on to learn more about all the cancelled games and studio closures as a result of Microsoft’s latest cutbacks.

Microsoft Gaming CEO Phil Spencer sent a memo to staff today addressing the cuts, claiming the job losses were necessary to allow for the “enduring success” of Xbox.

• Microsoft Announces Mass Layoffs Impacting Gaming Sector: Microsoft is cutting approximately 4% of its global staff, affecting about 9,000 employees, including numerous layoffs across its gaming studios as part of a strategic realignment.
• Studio Closures and Cancellations at Xbox Teams: Several Xbox studios, including Raven Software, Turn 10, Rare, and others, have experienced layoffs, with some projects like the game Everwild canceled due to these cutbacks.
• Impact on Prominent Games and Developers: Key titles such as Perfect Dark, Warcraft Rumble, and new projects from Romero Games have been canceled or faced funding cuts as a result of Microsoft’s restructuring.
• Statements from Microsoft and Xbox Leadership: Phil Spencer emphasized that the layoffs are necessary for Xbox’s long-term success and to focus on the strongest opportunities amid its current business growth.
• Broader Impact on the Gaming Industry and Development Teams: The layoffs have affected multiple well-known development teams supporting major franchises like Halo, Call of Duty, and others, reflecting a significant shift within Microsoft’s gaming division.

“We will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness,” he said.

Spencer also addressed the fact that the cutbacks are coming at a time when business is booming for Xbox. “I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger,” he said.

The success of Xbox today is the result of “tough decisions” Microsoft made previously, Spencer said.

“We must make choices now for continued success in future years, and a key part of that strategy is the discipline to prioritize the strongest opportunities,” he added. “We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come.”

Microsoft’s stock price slid slightly after the layoff news was announced, but the price has been trending upwards in the past five years and currently stands at a near-record high. Microsoft is currently the No. 2 most valuable company on the planet, only behind Nvidia.

Raven Software, an esteemed Call of Duty development studio, is said to have been affected by the cuts. The studio co-developed 2024’s Black Ops 6 and returns to co-develop 2025’s Black Ops 7. Raven is also known for its work on Call of Duty: Warzone. The exact number or nature of the cuts at Raven is unknown.

Forza Motorsport developer Turn 10 Studios was reportedly hit significantly by the Xbox cuts. A report said nearly 50% of staff were let go, though it’s not clear how many people this amounts to. The studio’s last release was 2023’s Forza Motorsport for PC and Xbox Series X|S.

British developer Rare was affected by the layoffs, too, with the studio’s upcoming game Everwild canceled.

The game was announced in 2019 and had been in development for reportedly 10 years before this decision came down. Anonymous developers speaking to VGC said that Rare couldn’t find the right direction for this project, even after it was rebooted.

A new MMORPG from The Elder Scrolls Online developer ZeniMax Online Studios, reportedly codenamed Blackbird, was said to be canceled. It had reportedly been in development in some form since 2018. Longtime exec Matt Firor is also leaving the company.

One of Microsoft’s newest studios, The Initiative, is closing up shop, and its first game, a new Perfect Dark, has been canceled. A report from May 2024 said the new Perfect Dark game was in “rough shape.”

Longtime Call of Duty co-developer High Moon Studios has been affected by the Xbox cuts, too, according to Charlie Intel. The studio has, for years, supported Call of Duty: Warzone and other Call of Duty projects.

Another Call of Duty co-developer, Sledgehammer Games, has faced layoffs as part of the wider cuts at Microsoft. That’s according to Charlie Intel and Insider Gaming.

Blizzard has announced that Warcraft Rumble support will not continue in its current form. While “systemic” events and bug fixes will still be made, no new content will be added. Aftermath reports that some Blizzard employees will shift to different roles, while others will be let go. An exact figure has not been confirmed, but it’s said to be as many as 100 people.

The wide-ranging Xbox layoffs this week also affected Halo Studios, the development team formerly known as 343 Industries that is working on multiple upcoming Halo titles.

Romero Games, the studio headed up by John and Brenda Romero, has announced that an unspecified publisher has canceled funding for its new game, and it’s believed to be Microsoft.

In a post, Brenda Romero said, “Our publisher has canceled funding for our game along with several other unannounced projects at other studios.” She added, “This was a strategic decision made at a high level within the publisher, well above our visibility or control.”

The wording and the timing suggest that Microsoft was the publisher for this new game, given that Microsoft just confirmed it had canceled multiple unannounced games. Romero Games said years ago when its new FPS was announced that it was working with a “major” publisher, and Microsoft would fit that bill. An affected staffer at Romero Games said outright on social media that, “Unfortunately, due to the recent Xbox layoffs, I’ve lost my position at Romero Games.”