Microsoft has laid off more than 9,000 employees in a move this week that also saw the shutdown of several studios and projects. They are saying this number is less than 4% of their total global workforce, but numerically, 9,000 is undoubtedly a number that hurts to see, even if they may want to focus on the 4%.

In a statement sighted by Variety, a Microsoft Spokesperson said:

“We continue to implement organisational and workforce changes that are necessary to position the company and teams for success in a dynamic marketplace.”

Both Perfect Dark and Everwild are two projects that have now been confirmed as cancelled, with Microsoft shutting down The Initiative, a studio formed in 2018 that had been working on Perfect Dark. The studio first revealed the game in 2020, and it received another showing in 2024 during the Xbox Games Showcase. It was missing from this past June’s showcase, with some wondering why, but now it seems the reason was writing on the wall.

Phil Spencer, in a memo to employers, again confirmed by Variety, said that the move is about “increasing agility and effectiveness.”

“Today we are sharing decisions that will impact colleagues across our organisation. To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organisational shifts will be shared by your team leaders in the coming days. 

I recognise that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger. The success we’re seeing currently is based on tough decisions we’ve made previously. We must make choices now for continued success in future years , and a key part of that strategy is the discipline to prioritise the strongest opportunities. We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come.  

Prioritising our opportunities is essential, but that does not lessen the significance of this moment. Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted. These decisions are not a reflection of the talent, creativity, and dedication of the people involved. Our momentum is not accidental—it is the result of years of dedicated effort from our teams.  

HR is working directly with impacted employees to provide severance plan benefits (aligned with local laws), including pay, healthcare coverage, and job placement resources to support their transition. Employees whose roles were eliminated are encouraged to explore open positions across Microsoft Gaming, where their applications will be given priority review.  

Thank you to everyone who has shaped our culture, our products, and our community. We will move forward with deep appreciation and respect for all who have contributed to this journey.”

In another memo, shared this time by The Verge, Matt Booty, President of Xbox Game Content and Studios, said the following:

“We have made the decision to stop development of Perfect Dark and Everwild as well as wind down several unannounced projects across our portfolio. As part of this, we are closing one of our studios, The Initiative. These decisions, along with other changes across our teams, reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape. We did not make these choices lightly, as each project and team represent years of effort, imagination, and commitment.

Our overall portfolio strategy is unchanged: build games that excite our players, continue to grow our biggest franchises, and create new stories, worlds, and characters. We have more than 40 projects in active development, continued momentum on titles shipping this fall, and a strong slate headed into 2026.”

For what games and studios you don’t have to worry about being affected, Variety also wrote in their piece that, “every game featured at the Xbox Games Showcase presentation in June is continuing [development].“

Our thoughts are with those affected across Microsoft, and we hope they’re able to find new positions elsewhere quickly.