Microsoft layoffs: Job cuts in Xbox division lead to game cancellations and shutdown of key studios
Microsoft’s July 2 layoffs have hit Xbox, leading to the closure of studios like Arkane Austin and Tango Gameworks, and the cancellation of multiple in-development games across its portfolio.
Microsoft announces mass layoffs On July 2, 2025, Microsoft announced it would lay off approximately 9,000 employees globally — about 4% of its total workforce — impacting multiple divisions, including Xbox.
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Xbox division hit as well While the exact number of Xbox-related job cuts is not confirmed, the company has officially shut down several studios and cancelled multiple in-development games.
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Xbox division hit with game cancellations and studio closures While the exact number of Xbox-related job cuts is not confirmed, the company has officially shut down several studios and cancelled multiple in-development games.
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Alpha Dog Games closed | Mobile game developer Alpha Dog Games, creators of Mighty Doom, has been closed, and all its planned mobile projects are scrapped.
Arkane Austin closed | Arkane Austin, known for Redfall, has been shut down. Plans for future updates or DLC for Redfall have also been cancelled.
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Tango Gameworks shut down Tango Gameworks, the studio behind Hi-Fi Rush and The Evil Within series, was also closed despite the success of its most recent title.
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Roundhouse Games absorbed into ZeniMax Online Studios Roundhouse Games will no longer operate independently, as its team is being merged into ZeniMax Online Studios.
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Multiple unannounced games cancelled Projects that were in early development across the affected studios — including new titles from Tango Gameworks and Alpha Dog — have been cancelled as part of the restructuring.
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