Xbox Staff Face Reported Layoff Waves in October, November and January

Xbox CEO Asha Sharma is planning the next rounds of layoffs for this month, November, and January, people familiar with the plans said, and those plans can change. That means three more rounds of layoffs in October, November, and January. Microsoft has yet to confirm the plans or disclose how many additional jobs could be cut. The cuts would come on top of 1,868 people already cut as part of plans to reduce headcount by 3,200 during the next year. For Metaintro readers who work at Xbox, at one of its studios or in the wider games business, this guide sets out what is actually known, which teams Xbox's own memos have already named, and what federal and Washington State layoff rules say a worker is owed before a mass layoff.

What Has Been Reported About the Next Xbox Layoff Rounds?

The company has not confirmed the future cuts.

The size of the coming rounds has not been given, and the coverage does not specify how many people the upcoming rounds will affect.

Running the layoffs in several waves has left some staff demoralized, feeling as if they are sitting under a yearlong cloud, waiting to see if their roles will be eliminated next. At least one Xbox employee was laid off but then given a chance to stay at the gaming unit, Fortune found.

Sharma has also slashed several management layers, and the people let go so far include devoted staff members who had worked at Xbox for decades.

Is the Next Round in October or November?

The next round is reported for October, since the plans name this month, November, and January. Cuts planned for October, November, and January is the reading in other follow-ups too, including layoffs that would take place in October, November, and January.

A shorter version, further layoffs in November and January, leaves out the October round.

No WARN notice for these new rounds appears in Washington's database. The plans come from people familiar with them, and layoff plans can change.

How Many Xbox Jobs Have Been Cut So Far?

The first round of cuts came in July, when Microsoft cut 4,800 jobs, about 2.1% of its global workforce, and the layoffs included 1,600 Xbox workers, with more to come this year. Sharma gave the full Xbox figure of approximately 3,200 jobs through Microsoft's 2027 fiscal year, which ends in June 2027, in a July 6 staff memo that she also posted on X.

In a September staff memo announcing a second round, Matt Booty, Xbox's chief content officer, set out the plan for eliminating 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer.

Washington received Microsoft WARN notices on the same dates as the two memos, one received 7/6/2026 for 605 workers in Redmond, with a layoff start date of 9/4/2026 and one received 9/22/2026 for 277 workers in Redmond, with a layoff start date of 11/21/2026. The database entries list Microsoft and Redmond, not a specific Xbox team, so they do not show how many of those workers were in the gaming unit. No Microsoft notice received after 9/22/2026 appears in the database search.

So far 1,868 people have been cut. September's cut was 268 roles, and other coverage gives around 260 employees.

I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and the teams around them. Matt Booty, in the September 22 Xbox Wire memo.

Which Xbox Studios and Teams Are Already Affected?

The September round fell on Halo Studios, other first-party studios, and the XGS management and central functions layer, and Xbox is reorganizing so it can operate fewer business units, aligning groups that already work closely together.

Four studios appear in the memo's update on our studio divestitures.

• Compulsion and Double Fine returned to management with their IP, back catalogs, and runway funding in August.
• Undead Labs has now successfully transitioned on similar terms, and with a new publisher will release State of Decay 3 day one on Game Pass.
• For Ninja Theory, two separate agreements fell through, and Xbox will begin consultation with employees on a proposed closure while continuing to explore other paths forward.
• At Arkane, consultation remains underway and is expected to continue through the end of the year.

Halo work has also moved. Activision will develop the next Halo title, led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty, and a small team at Halo Studios will continue supporting the Halo community and games in-market.

Xbox is steering financial resources away from smaller studios toward those that make Xbox's most iconic franchises, and studios now must present a clear, commercial investable business case, a requirement described by game designer Brian Fargo.

What Has Xbox Said About Its Business and Costs?

Sharma's July memo carried the line Our business today is not healthy, adding that Xbox was operating at margins that are 3-10x lower than comparable platform and publishing businesses. A Microsoft measure of profit margin has been around 3% for the Xbox unit. Sharma has been reshaping Xbox since taking over in February 2026, arguing that the business needs a more focused strategy and stronger financial performance.

Sharma pointed to a severe industry hardware crisis as costs soar for console components, and the next Helix console has internally been projected to cost consumers between $1,200 and $1,800 unless Microsoft subsidizes it. Higher hardware costs, fueled by memory chip shortages, are adding to the pressure on Xbox.

Sharma plans a next-generation handheld device by the 2027 holiday season and the next console by the holidays in 2028, and the core console still represents 80% of its business, in the view of former Xbox employees. Microsoft is also reducing expenditure on external vendors and trimming management layers within Xbox.

Many industry observers wonder if Nadella has put Sharma in charge to prepare for an eventual sale or spinoff. Sharma ruled out a sale in an interview with The New York Times, stating that Xbox is not for sale. She also said Xbox will look at the right partnerships, the right operating model and everything needed to achieve that, but did not say which partners she has in mind or what operating model Xbox would adopt.

Asha is one of the best leaders we have at the whole company. We would not have put her on a business we intend to sell. Microsoft commercial chief Judson Althoff, in the Fortune profile.

What Does the Federal WARN Act Require Before a Mass Layoff?

The federal rule is the Worker Adjustment and Retraining Notification Act, and the US Department of Labor WARN page links its worker's guide, employer's guide and an interactive advisor. Under it, you must receive a written notice 60 days before the date of a mass layoff or plant closing if the conditions in the guide apply.

Coverage depends on the employer and the size of the cut at one site. The law covers a business with 100 or more full-time workers, not counting workers who have less than 6 months on the job and workers who work less than 20 hours per week, or one that employs 100 or more workers who work at least a combined 4,000 hours a week, and that is a private for-profit business, private non-profit organization, or quasi-public entity separately organized from the regular government. A mass layoff under the guide is one where your employer lays off either between 50 and 499 full-time workers at a single site of employment and that number is 33% of the number of full-time workers at that site, or 500 or more full-time workers at a single site of employment.

Some workers fall outside it. WARN does not protect business partners, consultants, or contract employees assigned to the business but who have a separate employment relationship with another employer and are paid by that other employer, or who are self-employed.

If notice is missing, a worker who did not get the required notice may be able to seek damages for back pay and benefits for up to 60 days, depending on how much notice was actually given.

What Does Washington State Law Add for Redmond Workers?

The Xbox building sits on Microsoft's campus in Redmond, Wash., so Washington's rule covers layoffs at that site that meet its criteria. The state version is called Mass Layoffs and Business Closings, and it varies slightly from the federal WARN Act.

A mass layoff under the state rule is when an employer lays off 50 or more full-time workers during a 30-day period at a single site of employment. Sixty days before a layoff, companies must give written notice to the Employment Security Department, the affected employees, and to the chief elected official of the community where it happens.

The notice must tell you a lot. It has to include the expected layoff date and a schedule of any further employment reductions, the total number of employees affected, and the job titles, names and addresses of the affected employees in each job category. The Employment Security Department then posts a copy of the notice without employee information on the WARN database page, where the public can download it.

Workers have a legal route if the rule is broken. A worker who believes the employer broke the law can sue them in court within 3 years of the alleged violation, and an employer that does not comply may need to pay up to $500 for each day of the violation. An employer can avoid possible penalties if, within 3 weeks of the date of layoff, it gives employees back pay for each day of the violation, up to 60 days, at each employee's final rate of pay or their last 3-year average rate of pay, whichever is higher, and also covers the value of lost benefits.

Where Can Laid-Off Xbox Workers in Washington Apply for Benefits?

Unemployment benefits in the state run through the Employment Security Department. They are temporary income when you lose your job through no fault of your own, and they are not based on your financial need.

The basic test has three parts. You need to be able and available to work, and you need to meet the job search requirements. Washington offers a benefit estimator, an application guide and a quick eligibility quiz, though the only way to know for sure is to apply and start filing weekly claims.

Help reaches beyond cash benefits. Laid-off workers can also use services for laid off workers, WorkSource job search help and job training support, and the Unemployment Claims Center phone line is listed on the unemployment benefits page. Nationwide, the National Toll-Free Help Line can help with locating the nearest One-Stop Career Center.

What This Means for Game Developers, and What Should You Do Next?

Two figures are on record so far. Sharma has cut 1,868 people as part of plans to reduce headcount by 3,200. Counting the actions completed since July, inclusive of the studio divestitures, the restructuring is roughly three-quarters of the way through, by Xbox's September count. The next rounds are reportedly planned for October, November, and January, and Microsoft has yet to confirm the plans. Ninja Theory staff face a proposed closure, and Arkane consultation is expected to continue through the end of the year.

Here is what workers inside and around Xbox can do now.

• Know your notice rights before a meeting is booked. Check whether your site and headcount meet the federal WARN Act thresholds or the Washington rule for an employer that lays off 50 or more full-time workers during a 30-day period.
• Watch the public notice list. Washington posts employer notices in its WARN layoff and closure database, where a search for Microsoft lists each Redmond filing with its received date and layoff start date.
• Read the official memos. The Xbox Wire memo from September names the studios and areas affected.
• Set up benefits paperwork early. Washington's unemployment benefits page explains how to apply, choose a payment option and avoid delays.
• Check how contract work is treated. WARN does not cover contract employees assigned to the business but who have a separate employment relationship with another employer and are paid by that other employer.

Funding is moving toward studios that make Xbox's most iconic franchises, and Sharma plans to release a next-generation handheld device by the 2027 holiday season.

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People Also Asked

Q: When are the next Xbox layoffs expected?

A: The next rounds are planned for this month, November, and January, people familiar with the plans said, and follow-up stories list cuts planned for October, November, and January. Layoff plans can change, and Microsoft has yet to confirm the plans.

Q: How many Xbox jobs have been cut so far in the restructuring?

A: Xbox has cut 1,868 people as part of plans to reduce headcount by 3,200 during the next year, and the September memo set out eliminating 268 roles.

Q: How much notice must Xbox give before a mass layoff in Washington?

A: Washington requires written notice sixty days before a layoff when an employer lays off 50 or more full-time workers during a 30-day period at a single site of employment, and the federal WARN Act also requires a written notice 60 days before the date of a mass layoff when its conditions apply.

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