Microsoft's Xbox Layoffs Will Fall Short of 3,200 Target Amid Restructuring

Microsoft's gaming division layoffs announced earlier this year will not hit the 3,200-person target the company initially stated, according to reports from Windows Central's Jez Corden. The company is instead pursuing a mix of restructuring and employee transfers to different departments and studios.

In July, Microsoft announced plans to reduce its gaming workforce by around 3,200. However, sources indicate the total figure "will fall short of that previous estimate," with the company using alternative strategies including divestitures of studios like Double Fine, Compulsion, and Undead Labs, which is developing State of Decay 3. These studios are returning to independent operations rather than remaining under Microsoft's ownership.

Despite falling short of the 3,200 figure, total layoffs in Microsoft's gaming division this year are still expected to reach into the thousands. The latest round of cuts affected multiple studios including Halo Studios, The Coalition, World's Edge, Treyarch, and Xbox Game Studios broadly. The transition of the Halo franchise to Activision's stewardship resulted in significant staff changes at Halo Studios.

Xbox's chief content officer Matt Booty indicated in recent announcements that the company is "roughly three-quarters of the way through" its planned restructuring, suggesting additional changes may still occur. The restructuring reflects ongoing strategy shifts within the gaming division as Microsoft navigates its portfolio and organizational structure.