Xbox warns of a ‘reset’ as it prepares for layoffs

Microsoft is preparing significant layoffs across its Xbox division next month, with reports pointing to cuts in marketing and other parts of the business. Xbox leadership has been signaling hard choices, and sources say the moves could include changes to the studio lineup or even a studio closure.

The cuts suggest Microsoft is tightening Xbox spending after years of major gaming investments, including acquisitions and expanded studio operations. A potential studio reset would reflect broader pressure across the games industry to prioritize profitability over growth at any cost.