Image: Push Square
It’s a rough time for the video game industry at large – but especially so if you’re a developer working for a studio owned by Microsoft.
Rumblings about layoffs have been swirling for several weeks now, and the full picture is set to emerge as the Redmond firm’s financial year comes to a close later today.
According to Duke Nukem 3D dev and long-time video game producer George Broussard, this is “likely to be the largest single layoff event in gaming history”.
He added:
“Xbox is going to be supremely unpopular for a very long time and the devastation is going to reverberate like the meteor that took out the dinosaurs. On top of all that there will also be layoffs at the studios that remain.”
Earlier this week, it was touted that State of Decay 3 maker Undead Labs is one of four devs fighting for survival, with Double Fine, Compulsion Games, and Ninja Theory all on the edge.
There’s hope these teams may be able to find alternative funding or buy back their independence, otherwise they will purportedly be closed.
But the layoffs are set to hit every part of the Xbox division.
jfc, I just got word of a list of Xbox studio closures (no, not posting them). If it’s even close to true (and it’s from inside) this will likely be the largest single layoff event in gaming history.
Xbox is going to be supremely unpopular for a very long time and the… https://t.co/F13yU1Vj2K
— George Broussard (@georgebsocial) June 30, 2026
Microsoft CEO Satya Nadella has said on record that the console maker needs to be sustainable, following 25 years of investment at large. The company has spent close to $100 billion on acquisitions over the past several years.
The expectation is that Xbox will dramatically scale back its operations with this round of layoffs, doubling down on tentpole franchises like Fallout, Call of Duty, and The Elder Scrolls.
The scale of the layoffs may not become clear until later this week, although given all the speculation around it, this is going to be a devastating week for the industry at large.
As the Editor of Push Square, Sammy has over 15 years of experience analysing the world of PlayStation, from PS3 through PS5 and everything in between. He’s an expert on PS Studios and industry matters, as well as sports games and simulators. He also enjoys RPGs when he has the time to dedicate to them, and is a bit of a gacha whale.