The rumors that Xbox will probably be letting go of 1000’s of staff this January will not be true, in keeping with Microsoft’s CCO. It has been a wild couple of years for the tech large, which has turn out to be the world’s largest video games writer however has additionally struggled to compete within the {hardware} house and has turn out to be notorious for cancellations and layoffs. For now, although, it looks as if Xbox will probably be spared from one other large job minimize.
In the summertime of 2025, Microsoft laid off thousands of employees throughout the globe, equal to roughly 4% of its workforce. That spherical of cuts noticed many video games get canceled and a number of other studios shut their doorways for good within the greatest mass firing on the firm since 2023. Over the previous few years, sweeping layoffs have turn out to be an unlucky development at Microsoft, so many didn’t query current rumors that one other spherical of company cutbacks was in retailer. Nevertheless, these predictions might not have been correct this time round.
Fable 2026 Isn’t Out of the Woods After Microsoft Layoffs and Cancellations
Xbox’s current ‘restructuring’ outright led to the cancellation of many video games, however it has finished little to supply reduction for different tasks like Fable.
Microsoft CCO Says Xbox Layoff Rumors are ‘100 P.c Made Up’
As information of layoffs attributable to rising AI prices started to flow into, Microsoft CCO Frank X. Shaw responded to 1 such declare on X, saying the rumor was fabricated. The response got here after famous insider Jez Corden additionally denied the idea, a minimum of because it pertains to Xbox. It is unclear if Shaw can also be solely talking about Xbox, as the unique rumor mentioned the layoffs can be unfold throughout the gaming phase, Azure Cloud, and gross sales groups, however his staunch tone seemingly suggests all the report is fake. Sill, it is easy to see the place the rumors would possibly stem from, as Xbox did replace hundreds of laid-off workers with AI in 2025, and the corporate has pushed onerous for the expertise currently.
Alternatively, there’s additionally cause to imagine Xbox can climate rising AI prices with out one other spherical of layoffs. After the notorious 2025 cuts, Microsoft CEO Satya Nadella said the company was “thriving,” with its present and projected financials wanting robust. Within the tech large’s most up-to-date monetary assertion, it mentioned 2025 “was a yr of document efficiency,” with total earnings rising 17% to $128.5 billion. After all, it is value noting that Microsoft’s working revenue additionally grew by a double-digit proportion in 2024, and people billions in earnings didn’t cease the corporate from shedding staff, so efficiency just isn’t all the time a direct indicator of employment traits.
Even when Xbox doesn’t endure a spherical of layoffs this January, the corporate’s enthusiasm round AI is plain. Nadella has beforehand expressed hopes that Microsoft could use AI to generate entire games, and the usage of generative AI has already cropped up in massive franchises like Name of Obligation and Halo. Whether or not this rising AI use will result in job cuts is unsure for now, however it stays controversial amongst players and business insiders alike. Some advocate for it as a strategy to save builders time and assets, whereas others categorical fears that it might affect jobs or result in copyright considerations for smaller artists.
Whereas Microsoft is probably not terminating jobs this month as some have feared, layoffs have turn out to be a worrying development throughout the business as a complete. In October 2025, Amazon cut over 14,000 jobs, lots of which got here from the corporate’s gaming phase. Funcom, Crystal Dynamics, and EA all suffered layoffs in 2025, too. It is an uncommon time for video video games, with gaming being extra common than it ever has been, whereas many studios, small and huge alike, grapple with monetary challenges amid rising growth prices and a aggressive market. Solely time will inform how issues pan out from right here.
