Xbox is laying off 3,200 people and dumping 4 studios in 'the most significant restructure in Xbox history'

Asha Sharma, chief executive officer of Xbox,, during the Bloomberg Tech conference in San Francisco, California, US, on Thursday, June 4, 2026. The event brings together the leading CEOs, investors and innovators who are harnessing technology to change the world around us. Photographer: David Paul Morris/Bloomberg via Getty Images.

The axe has fallen on Xbox, which announced another major round of layoffs that will see approximately 3,200 people put out of work, with 1,600 losing their jobs today and another 1,600 to follow over the course of the company's fiscal year. Four studios—Compulsion Games, Double Fine, Ninja Theory, and Undead Labs—will also "leave Xbox to new management," as CEO Asha Sharma put it.

None of those studios will close as a result of today's cuts, which is the only upside to the whole thing: Compulsion and Double Fine will go independent again, "with their IP, catalog, and runway for their next games," Sharma said, while Ninja Theory and Undead Labs are being sold to unnamed new owners.