The Communications Workers of America (CWA) has filed unfair labor practice charges against Microsoft with the National Labor Relations Board, accusing the company of bad faith bargaining, coercive actions, contract repudiation, and failing to provide employee notice. These charges follow recent mass layoffs and studio upheavals within the Xbox division.

On July 6, Microsoft announced plans to cut 1,600 jobs immediately across its Xbox division, with an additional 1,600 employees expected to be laid off in the following fiscal year. The layoffs impacted studios including Activision, Blizzard, King, Mojang, Xbox Game Studios, and Zeni Max. Microsoft also divested four Xbox studios: Compulsion Games, Double Fine, Ninja Theory, and Undead Labs.

CWA Canada is also pursuing legal action against Microsoft. The union represents hundreds of employees at Xbox studios in the US and Canada, including Bethesda workers in Montreal, who were reportedly shocked by the lack of advance notice regarding the layoffs. Union members had previously called for transparent negotiations and accused the company of neglecting proposals and delaying worker protections. Protests, such as the Save Our Devs rally, have occurred in response to the layoffs.