Sources claim that Microsoft is bracing for more layoffs, which will specifically affect the Xbox division.
Word from inside is layoffs may begin as soon as next week, marking Xbox's fourth major reduction in a year and a half.
The company hasn't revealed the full scope, but reports from experts put the affected employee count between 1,000 and 2,000.
That's roughly 10–20% of the entire Xbox workforce, making this one of the largest shakeups yet in the gaming arm of the tech giant.
One of the biggest concerns right now surrounds Turn 10 Studios, the long-standing developer behind the Forza Motorsport series.
Why Is Turn 10 Specifically at Risk?
According to reports from journalists like Tom Warren and commentary from industry figures such as George Broussard, Turn 10 has been specifically flagged as a team currently "bracing for cuts."
This is especially remarkable considering Turn 10's ongoing work on new Forza projects and their big 2023 release. Still, the weaker reception of that release probably made Microsoft prioritize the more popular Forza Horizon franchise from Playground Games.
Who Else Is at Risk Across Xbox?
Rumors connect developers from Ninja Theory, Rare, and Compulsion Games with the possibility that their studios could close entirely.
While not everything is confirmed, plenty of insiders believe the worries are justified.
Some of Xbox's smaller or less successful teams might face cuts, and even studios with projects in the pipeline don't feel secure, especially after closures like Tango Gameworks, which shut down despite releasing hits like Hi-Fi Rush.
How Does This Compare to Past Xbox Layoffs?
These layoffs come after Microsoft cut 6,000 employees in May 2025 and followed earlier rounds where more than 1,900 workers were let go from Activision Blizzard and Xbox in January 2024.
By May that year, Microsoft had shut down multiple studios, including Arkane Austin and Alpha Dog Games. Another 650 jobs were cut in September 2024, with prior reductions affecting non-Xbox groups like HoloLens and Azure as well.
Microsoft seems to be following that trend again, with reports suggesting a reorganization of Xbox's sales and distribution in central Europe. While the restructuring promises cost savings and better focus for Microsoft, it's also revealing a disconnect with its community.
It's uncertain if Turn 10 will come out of this cut intact or fall victim, but what's obvious is Xbox is entering a new phase, and some won't make the cut.
Stay tuned to racinggames.gg: the best place for Forza coverage.