Insider believes next round of Microsoft layoffs will impact Xbox gaming division jobs

Microsoft recently announced 305 layoffs following a May cutback of around 6,000 workers. The company didn't reveal if the changes involved Xbox gaming division. However, The Verge's Tom Warren now believes that further Microsoft layoffs will impact gamers. The restructuring would happen as it focuses more on software than on developing a new Xbox console.

In his article, Warren describes how morale is gradually falling among employees. Adding to the anxiety is the uncertainty about when more Microsoft layoffs may occur. Workers wonder about the company's long-term plans and their potential impact on them. Warren has learned that more unhappy news could arrive as soon as the end of June. Unlike recent downsizing efforts, Microsoft Gaming may face significant upheaval.

Xbox gaming is hardly immune to layoffs, but most happened in 2024 following the Activision Blizzard merger. In January 2024, Phil Spencer announced that the company would be cutting approximately 1,900 jobs from a team of around 22,000 workers. The reorganization included Corporate Vice President of Gaming Mike Ybarra, who had been with the company since 2009.

With Xbox shifting its priorities, more workers losing their jobs wouldn't be surprising. Sales of consoles have faded while Microsoft focuses on cross-platform publishing. Gamers can now find first-party games even on Sony's PS5. Meanwhile, facing a threat from SteamOS, Microsoft wants to optimize Windows devices for gaming. Asus may soon release an Xbox-themed handheld PC similar to the ROG Ally.

According to Windows Central's Jez Corden, Microsoft's plans for another new Xbox console are in flux. Still, a Series X sequel remains in development for a potential 2027 arrival. The manufacturer hasn't abandoned hardware entirely, with rumors of three controllers in the works. Nevertheless, the changing priorities of Microsoft Gaming could explain why Tom Warren anticipates layoffs.

Any negative Microsoft Gaming news is unlikely to be announced until after the June 8th Xbox Games Showcase.