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- Insider says to brace for massive layoffs at Xbox in Q1 2026.
- This reduction in the workforce will be just as massive as the last one.
- This will be the 5th time Xbox will lay off staff in just 2 years.
Microsoft’s gaming division has been on a downward trajectory for almost two decades now, and 2025 marked its lowest point. However, the gaming giant is expected to fall even deeper into the pit hole with more dark days expected soon.
New reports suggest that Xbox is soon to be hit with another massive wave of layoffs going into Q1 2026. To give a hint, this round of workforce reduction will be just as substantial as the most recent one during the summer.
Why it matters: The gaming industry has been hit with layoffs after layoffs, with millions of dollars worth of projects cancelled, studios shut down, and worse things happening.
One reliable industry insider, by the name of SneakersSO, claims that Xbox will soon downsize its company, marking the gaming giant’s fifth round of layoffs in just two years.
Earlier this year, on July 2nd, Microsoft laid off 9,000 employees across all departments, with an estimated 2,000 people from Xbox affected. The result was the closure of The Initiative studio, and multiple projects were cancelled.
Xbox has a vast portfolio of IPs, especially following recent acquisitions; however, for the future, they will shift their focus to their core ones. Furthermore, recent reports also suggest they’re ready to abandon the hardware department overall.
As such, the next round of layoffs may affect the core Xbox team, since there will be no hardware to manufacture. The future of Xbox appears to be uncertain and concerning, and even on the publisher route, doubts have started to arise.
The Game Pass price hike saw a surge of users rushing to the website to cancel their subscriptions, and the loss has already been incurred. CoD suffered $300 million in sales due to the same service.
For the future, expect Cloud Gaming to keep Xbox’s brand alive, as the OEM’s plans are also likely dead, since nobody would want to collaborate with Team Green after this rough patch.
What are your thoughts on these recent developments at Team Green? Let us know in the comments below, or at the official Tech4Gamers Forums.
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[Staff Writer]
Shaheer is currently pursuing a Business degree while also working as a part-time Content Writer. With his deep passion for both writing and video games, he has seamlessly transitioned into a role as a Journalist. Over the past two years, Shaheer has contributed as a freelancer to various websites and landed positions on acclaimed platforms like Gamerant. Currently, his role at Tech4gamers is as a Features Writer, but he also covers News occasionally. Shaheer’s favorite gaming franchises are Assassin’s Creed and the God of War series.
Get In Touch: shaheerzahid03@gmail.com
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