Xbox reportedly set to announce second round of layoffs this week

Xbox is reportedly preparing for a second round of employee cuts this week, according to The Information. The restructuring, part of the company's ongoing overhaul, may involve consolidating several of its game studios, including Bethesda, Activision, and Blizzard, according to VGC. Xbox initially announced plans to lay off 3,200 workers in July, resulting in 1,600 job losses, primarily at Obsidian, Bethesda, Id Software, and Zenimax Online Studios.

Five studios were divested, with Compulsion Games and Double Fine Productions becoming independent, while Ninja Theory and Undead Labs are being acquired, and Arkane Lyon is undergoing a consultation process. Xbox CEO Asha Sharma cited the company spreading itself too thin as the reason for the restructuring, stating that they made numerous bets and failed to focus on the core business.

The CEO noted that the number one measure of strategy is resource allocation and that Xbox spread itself too thin. In a memo to staff, Sharma outlined plans to limit management layers to five, addressing concerns about some teams having up to 14 layers. Sharma emphasized that these changes are about a bigger future for Xbox, aiming to entertain more than a billion people daily and provide opportunities for creation and connection.