New Xbox CEO Asha Sharma’s “reset” of the company in July 2026 spelled the end of jobs for thousands.
On the morning of July 6, 2026, Sharma revealed 1,600 Xbox employees had lost their jobs, with 1,600 more yet to go before the end of the 2027 fiscal year. Even more employees across other departments of Microsoft had been let go, too, marking a truly dark day in the tech industry.
The Xbox layoffs took place across a number of studios and companies, including the selling of a number of studios. Thankfully, no studios have been fully closed, but Sharma still called it “the most significant restructure in XBOX history.”
“None of our first-party publicly announced games or projects are being cancelled as part of these reductions,” Sharma also said, meaning that any game that’s been revealed to have been in development is safe so far.
Here’s everything we know so far about what developers and games have been affected by Sharma’s “reset.”
Table of contents
July 2026 Xbox reset layoffs and changes
Compulsion Games
- Games it’s known for: South of Midnight, We Happy Few, Contrast
- How it’s been affected: Allowed to become independent along with “their IP, catalog, and runway for their next games.”
Double Fine Productions
- Games it’s known for: Kiln, Keeper, Psychonauts, Grim Fandango
- How it’s been affected: Allowed to become independent along with “their IP, catalog, and runway for their next games.”
Ninja Theory
- Games it’s known for: Senua franchise
- How it’s been affected: “Entered terms to join new ownership with funding to complete and grow Senua.”
Undead Labs
- Games it’s known for: State of Decay franchise
- How it’s been affected: “Entered terms to join new ownership with funding to complete and grow State of Decay 3.“
Arkane Lyon
- Games it’s known for: Blade, Redfall, Deathloop, Dishonored, Prey
- How it’s been affected: The studio’s “management is beginning required consultation with its Works Council to review potential strategic options.”
Activision
- Games it’s known for: Call of Duty, Crash Bandicoot
- How it’s been affected: “Reductions” and “shifting investment to focus on higher priority projects.”
Blizzard
- Games it’s known for: Overwatch, World of Warcraft, Diablo
- How it’s been affected: “Reductions” and “shifting investment to focus on higher priority projects.” According to Jason Schreier of Bloomberg, “the staff of Blizzard Entertainment were told today that they won’t hear how the reorganization impacts them until ‘further communications.'”
Bethesda/ZeniMax
- Games it’s known for: Fallout, The Elder Scrolls, Doom, Quake, Wolfenstein
- How it’s been affected: “Reductions” and “shifting investment to focus on higher priority projects.” id Software (Doom) and ZeniMax Online Studios (Elder Scrolls Online) “are cutting a significant number of staff,” according to Bloomberg’s Jason Schreier, with reports suggesting around half of each studio’s workforce has been let go.
King
- Games it’s known for: Candy Crush
- How it’s been affected: “Reductions” and “shifting investment to focus on higher priority projects.”
Mojang
- Games it’s known for: Minecraft
- How it’s been affected: “Reductions” and “shifting investment to focus on higher priority projects.”
This article will be updated as more information about Xbox’s restructuring is revealed.
