Xbox layoffs: Microsoft discontinues games from Rare and The Initiative

Microsoft is cutting 9000 jobs – many of them in its Xbox division. Microsoft began informing employees about the moves on Wednesday. A somewhat more comprehensive picture is now emerging as to which areas of Microsoft's gaming division are affected by the redundancies and to what extent.

• The hardest hit is The Initiative studio in Santa Monica, which is being closed completely. Founded in 2018, the studio was tasked with developing triple-A games and hired ex-employees from Rockstar Games, Sony Santa Monica and Naughty Dog. The team worked on a new edition of “Perfect Dark”, for which a trailer was shown in 2024. With the closure of The Initiative, the development of 'Perfect Dark' also came to an end and the game was scrapped.
• According to Bloomberg reporter Jason Schreier, almost half of the employees at Turn 10 Studios, the developer of “Forza Motorsport”, have to go. The Verge writes of around 70 people, which represented the “vast majority” of the Redmond studio. Turn 10 was still working on new content for “Forza Motorsport”. It is unclear whether a new title was in development.
• The traditional studio Rare is also affected. The developer behind “Sea of Thieves” was most recently working on a title called “Everwild”, which is now being discontinued. According to Videogameschronicle, it is likely that several Rare employees will also lose their jobs. Several executives are to leave the studio.
• The studios Undead Labs (“State of Decay”) and King (“Candy Crush”) are also to be impacted by the wave of redundancies.
• Jobs are also being lost at “Call of Duty” studios such as Raven, reports Jason Schreier.
• An as yet unannounced game from Zenimax Online Studios will be discontinued.
• The mobile game “Warcraft Rumble” will no longer receive any new content, Blizzard announced.

“Positioning for lasting success”

“To position gaming for continued success and focus on strategic growth areas, we will be discontinuing or reducing work in certain areas of the business,” wrote Xbox boss Phil Spencer in an email to employees. Accordingly, management levels are to be reduced to improve agility and effectiveness. “Thank you to everyone who has shaped our culture, our products, and our community. We will continue with great appreciation and respect for everyone who has contributed to this journey,” it says.

This is already the fourth wave of layoffs in the Xbox division since last year: at the beginning of 2024, 1900 of around 22,000 Xbox employees were laid off. In May of that year, Microsoft closed several game studios, before another 650 jobs were lost in the Xbox division in September.

(dahe)