Microsoft plans to initiate layoffs in its Xbox division on July 6, 2024. Reports indicate the cuts may include shutting down Arkane Studios and canceling the Marvel game Blade, which has been in development since late 2023, according to Tom Warren at The Verge.
The company is considering closing or selling five studios: Compulsion Games, Double Fine, Ninja Theory, Undead Labs, and Arkane. Reports suggest that Blade is facing budget overruns and delays, with no updates in over two years.
The entire Xbox division is preparing for these layoffs following a memo from new CEO Asha Sharma and Chief Content Officer Matt Booty, stating, “We have found ourselves over-extended…. Going forward, this cannot continue.” The CWA union expressed disappointment and called for good-faith negotiations with Microsoft ahead of the layoffs.
Arkane Studios, also known as Arkane Lyon, developed the Dishonored series and Deathloop. The studio’s Austin branch was shut down in 2024 amid previous cuts. Dinga Bakaba, co-creative director of Arkane Lyon, criticized corporate practices and emphasized the need for better treatment of artists during difficult times.
The video game industry has experienced significant job losses, with an estimated 14,600 employees laid off in 2024, following a loss of about 10,500 in 2023, according to the Game Industry Layoffs tracker.
Microsoft’s $69 billion acquisition of Activision Blizzard King in 2023, the largest in the industry, followed its $7.5 billion purchase of ZeniMax, which included Arkane Studios, in 2021. In January 2024, the company laid off 1,900 employees across its gaming divisions. Other cuts throughout 2024 involved the shutdown of Arkane Austin and Alpha Dog Games, and the sale of Tango Gameworks.
In summer 2025, Microsoft announced another wave of layoffs, affecting 9,000 employees company-wide. IO Interactive, which was developing a fantasy game with Xbox as a publisher, has already reduced staffing after its collaboration with an external partner ended. However, Kojima Productions’ game OD, published by Xbox, will remain unaffected by the layoffs.
