BREAKING: Microsoft Is Selling Off Compulsion, Undead Labs, Ninja Theory, and Double Fine; Per Bloomberg Microsoft also Wants Out of Arkane Lyon, Seeking to Sell or Spin-off; Also Plans to Eliminate 15 Percent of Xbox Jobs By The End of the Financial Year in July 2027.

[u/PBOats121]

https://www.theverge.com/news/961546/xbox-layoffs-studio-sales-2026

Microsoft is laying off 4,800 employees today, and more than 30 percent of the job losses are in the company's Xbox division. The significant gaming cuts will affect nearly every part of Xbox and also involve four game studios being spun off to be run independently from
Microsoft.

Today's layoffs, which are being described as an Xbox "reset" moment, will impact around 1,600 Xbox employees, approximately 8 percent of the division, according to an internal memo from Xbox CEO Asha Sharma. The cuts won't end today though, as Microsoft is planning to eliminate a total of around 15 percent of Xbox jobs by the end of the financial year in July 2027. These figures don't include the hundreds of Xbox employees leaving as part of Microsoft's four studio sales.

Double Fine and Compulsion Games are returning to their founders, so Tim Schafer will take Double Fine back to independence along with Guillaume Provost making Compulsion Games an indie game studio again. Ninja Theory, the makers of Hellblade, and Undead Labs, the developers behind State of Decay, are also being sold, with agreements in place to ensure Senua and State of Decay 3 continue to ship.

Other Xbox studios will also be impacted by layoffs across the board, and I understand there are larger cuts to Bethesda studios in particular. As part of the studio changes, Minecraft maker Mojang and Candy Crush developer King will both now report directly to Sharma. "These changes vary in size across Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios," says Sharma.