Xbox Confirms 3,000 Layoffs as Double Fine and Ninja Theory Changes Hit
It’s been a busy stretch for the video game industry, and the latest developments keep that momentum going. For weeks, there were whispers that Xbox was preparing serious workforce cuts, with speculation pointing at multiple studios—including Double Fine, Ninja Theory, and even Arkane—as potential targets.
Those rumors have now been confirmed. Xbox has formally outlined the changes in a post shared on CEO Asha Sharma’s social media account.
Xbox Confirms Layoffs And Studios Being Sold
The most immediate impact is staffing. Microsoft says it will reduce its workforce by roughly 4,800 employees, with about 3,200 of those positions tied to Xbox. Within that number, 1,600 roles are described as “role eliminations” happening immediately. Separately, four Xbox-owned studios will be moved under new leadership arrangements.
The studios listed for those changes are Double Fine, Compulsion, Ninja Theory, and Undead Labs. Xbox clarified that none of these teams are being fully shuttered. Instead, Double Fine and Compulsion are being handed back to their existing management structures, effectively becoming independent studios—an approach similar to how Toys For Bob previously separated from Xbox.
At this point, the earlier chatter surrounding Senua appears to have been more about encouraging investor interest than signaling a specific studio outcome.
Meanwhile, Ninja Theory and Undead Labs seem to have already transitioned out of Xbox’s direct ownership, with new proprietors taking over. However, the company hasn’t named who the new owners are. Xbox also states that both studios have been provided with funding to finish their current projects: the third Hellblade entry for Ninja Theory, and State of Decay 3 for Undead Labs.
Arkane’s situation is more complicated. Because the studio is based in France, Xbox can’t simply shuffle people around or restructure operations in the same way it could elsewhere, given stronger labor protections in the country. Sharma says Arkane’s next steps are still being determined, but she notes the studio is “beginning required consultation with its Works Council to review potential strategic options.”
As for the studios that remain under Xbox’s umbrella, none of their currently announced games are being canceled. Still, the company says cuts have been made and spending is being redirected toward “higher priority projects.” There’s also a leadership change: Mojang and King will report directly to Sharma, with the rationale that both companies are tied to games that “increasingly become platforms” and represent the biggest efforts by monthly active users.
That covers the major points of the layoffs and studio restructuring. Even with the outcome being less catastrophic than some worst-case fears, the situation is still difficult to read. The total reductions are severe, and it’s unsettling regardless—but it’s a comparatively better scenario that no studios are being outright closed right now. For everyone affected, the hope is that they can find stable footing again as quickly as possible.
