Microsoft is reportedly gearing up for a wave of layoffs in its Xbox division this July, weeks after new CEO Asha Sharma and CCO Matt Booty warned that the business had become over‑extended. The memo they issued cited the $69 billion Activision Blizzard King acquisition and $89 billion spent on studios, while annual revenue slipped by half a billion dollars.

The Communications Workers of America (CWA) union, which now covers roughly 3,500 game‑industry workers, is pressing Xbox leadership for a transparent, good‑faith bargaining process. Union officials argue that the company’s recent console price hikes and CEO Satya Nadella’s $96 million 2025 compensation prove there is ample cash to protect jobs, yet executives appear to divert funds elsewhere.

Developers recount sudden studio closures—Double Fine, Ninja Theory and Compulsion Games—and abrupt project cancellations that erase years of talent and institutional knowledge. With the union’s contract at ZeniMax already securing salary floors and AI safeguards, workers now demand a formal layoff protection framework before the fiscal year ends.