Microsoft lays off Xbox staff and cancels key games

The video game industry has taken an unexpected hit: Microsoft has confirmed a new round of mass layoffs directly affecting its gaming division, including key studios like Rare and ZeniMax Online Studios . This measure, part of a global strategy to reduce costs and streamline operations , marks the fourth major cutback at Xbox in less than two years.

The announcement represents a severe blow not only to employees but also to fans. Long-awaited games like Rare Studio's Everwild and a new online title from ZeniMax have been canceled, raising uncertainty about the company's creative direction.

Among the hardest hit studios are two creative giants in the Xbox universe: Rare Studio , known for gems like Sea of ​​Thieves , and ZeniMax Online Studios , developer of The Elder Scrolls Online . Both have seen significant staff cuts and the elimination of key projects that have been years in development.

According to insiders cited by Bloomberg News, Rare's ambitious fantasy game Everwild will no longer be released, as will an untitled MMORPG from ZeniMax that promised to expand the legacy of online RPGs under the Xbox label.

Microsoft Gaming CEO Phil Spencer justified the cuts as part of a prioritization strategy . In an email sent to employees, he explained that it's time to make tough decisions to ensure long-term success.

The message is clear: Microsoft wants a leaner, more profitable division , especially after its historic $69 billion acquisition of Activision Blizzard , which closed in October 2023. The pressure to generate profits has intensified, and the first sacrifices are evident.

In total, more than 9,000 employees are estimated to have been laid off in this new wave at the corporate level. Of these, a few hundred are from the Xbox division and Microsoft Gaming . Candy Crush developer King will cut 10% of its staff (approximately 200 positions), and other European offices, such as ZeniMax in Germany, have also begun reporting cuts.

Although Microsoft hasn't provided exact figures for each study, the impact is widespread, and laid-off employees will be given priority when applying for other open positions within the company.

Players and analysts are wondering what impact these cuts will have on Xbox's release roadmap . While Phil Spencer assures us that the future is solid, with an evolving platform and hardware, the creative blow is undeniable.

Xbox is going through a critical moment, one in which it must demonstrate that it can maintain its identity and innovation in a competitive environment while improving its profitability. Will it be possible to balance operational efficiency with the creativity that gaming audiences demand?

The cancellation of games like Everwild and the mass layoffs at Microsoft Gaming reflect a painful but strategic transition . The company is looking to adapt to market changes, reduce costs, and pave the way for a more agile ecosystem. However, the trust of the gaming community is being tested , and the challenge will be to demonstrate that Xbox remains synonymous with innovation and quality, despite the losses.