Unionized Xbox Developers Demand Answers Before Rumored Microsoft Layoffs

Unionized Xbox staff are pushing back as Microsoft faces mounting pressure over rumored job cuts, laying out a list of demands they want addressed before any changes hit. During a public appearance, workers said they’re frustrated with how negotiations have been handled and how uncertainty is affecting both morale and productivity across the platform.

Earlier today, the Communications Workers of America (CWA) hosted a press conference where several unionized Xbox employees spoke directly against Microsoft’s approach. The event comes amid reports that layoffs at Xbox are imminent, with insiders describing the situation as a “bloodbath.”

For many speakers, the current moment is a painful echo of Microsoft’s broader layoffs from last year. Those cuts reportedly eliminated 9,000 roles company-wide rather than only within Xbox, and the fallout included cancellations of multiple initiatives—among them the long-awaited reboot of Perfect Dark. The studio behind that effort, The Initiative, was also reportedly shut down without having released a single game.

Potential studio closures and the “reset” memo

Workers at the press conference also warned that more studios may be in the crosshairs. Reportedly at risk are teams such as Double Fine and Ninja Theory, alongside Complusion Games, the developer behind South of Midnight. Complusion Games had recently won a Peabody Award earlier this year, but employees say the studio still appears vulnerable despite that recognition.

New Xbox boss Asha Sharma celebrated the award publicly on social media months before Complusion Games was reported to be closing. Her post praised the win as “a well-deserved recognition for storytelling that truly matters!”

According to the concerns raised during the event, developers are reportedly discussing possible paths such as finding new owners or moving toward independence. Microsoft, however, has not clearly confirmed layoffs or studio closures to the public. Even so, Sharma reportedly told staff in a memo that the company plans to run a “reset” so it can position itself better for the future—language that union members say has only intensified fear about what comes next.

Speakers at the CWA event said their frustration goes beyond the rumors themselves. They claimed Microsoft has not given all union representatives sufficient time to bargain, and one member alleged that a proposal was left sitting for four months.

Still, one union speaker acknowledged that there have been moments of progress elsewhere. They pointed to the World of Warcraft bargaining team at Blizzard, which saw “real gains” this past weekend.

What the union says it wants from Microsoft

During the press conference, employees described specific protections they want Microsoft to put in place. That includes advance notice of layoffs, two years of recall rights so impacted workers can be rehired if their roles reopen, and severance that they describe as adequate.

They also asked for voluntary severance options to help avoid involuntary cuts. Another demand is that Microsoft transfer affected staff to other studios or roles within the wider company when possible, instead of treating layoffs as the only answer.

Beyond union-only coverage, speakers said they want guardrails that apply to all workers, not just those who are part of the bargaining group. In other words, the goal is broader protections across Xbox rather than safeguards limited to a single segment of employees.

Microsoft responded through a spokesperson who said the company is working with the CWA to reach an appropriate deal. The spokesperson added that Microsoft respects team members’ right to make their voices heard and cited a “long track record” of good-faith partnership with labor groups. They also referenced finalized bargaining agreements already reached with the CWA and said negotiations are continuing in good faith with the goal of securing agreements across Xbox.

Several speakers said they personally feel replaceable in the process. At the press conference, they described themselves as “expendable” and “dispensable.”

One of the most direct statements came from ZeniMax Online Studios senior encounter designer Morgan Goin. They said, “We refuse to be left in the dark as the company decides to restructure in a way that seriously affects us all.” Goin added that workers are treated as valuable one week and cut the next, arguing that conditions like that make it hard for developers to produce their best work. They said, “Hard work and great games do not save you from layoffs under Microsoft. That’s why we’re coming together across Xbox to make our voices heard and to demand real accountability.”

Goin also claimed that Microsoft’s own decisions have created problems that others are now being forced to absorb. They pointed to a new round of console price increases announced last week, which they said was driven by a component crisis. They argued that heavy investment in AI has pushed up costs—particularly for RAM—making it harder to build affordable consoles, while Microsoft remains a major player in the AI market.

Continuing their argument, Goin said it doesn’t make sense to claim workers are too expensive while prices for players keep rising. They said, “Even as the company calls us too costly to keep, it is raising console prices on players again, citing a RAM shortage that Microsoft itself has exacerbated,” and added that with rumors circulating and players paying more, executives are framing the situation as a “reset.”

Diablo senior environment artist Mahreen Fatima echoed that stance, arguing that Microsoft’s AI spending shows the company has significant resources. Fatima said leadership points to revenue and margins to justify cuts, but then raised console prices on players for the third time since 2025. They concluded that Microsoft is not short on money, pointing to “the billions” invested in AI, and said the company is still choosing not to protect workers.

Impact on workers—and players

Blizzard senior editor Alison Veneto told the press conference that limited protections and the threat of layoffs make it harder to do the job well. They said the constant uncertainty drains focus away from game development and that employees want to spend their time building great experiences for players.

“My coworkers just want to focus on making amazing games for players,” Veneto said. They added that staff don’t want to spend every day wondering whether another round of cuts is coming, saying the pressure pulls energy away from creativity. Veneto argued that layoffs should be treated as an absolute last resort rather than a quick tool to adjust a quarterly balance sheet.

Vehemently, they said if layoffs can’t be avoided, Microsoft should offer common-sense protections and reduce the burden on affected employees—not only for the workers at the bargaining table but for everyone impacted by Xbox cuts. Veneto said, “Our game developers deserve that.”

What happens next remains uncertain, but Activision QA tester Andrew Snell and Fatima both stressed that Microsoft’s choices affect more than just workers. Snell said, “Workers and players are on the same side of this and we’re done paying for executives’ failures.”

Fatima followed up with a message aimed at both Microsoft and the broader audience. “We, the developers, demand that you respect our labor and our games,” they said. They added that developers and players have built a large community together and that it has “touched the lives of millions of gamers everywhere,” urging Microsoft not to disrespect either the creators or the player base.

Quick facts

• Unionized Xbox employees are responding to reported looming layoffs at Xbox.
• The CWA held a press conference with union members criticizing Microsoft’s negotiation process.
• Insiders described the rumored Xbox layoffs as a “bloodbath.”
• Last year’s Microsoft-wide layoffs reportedly removed 9,000 jobs and led to cancellations, including the Perfect Dark reboot.
• The Initiative was reportedly shut down without releasing a game.
• Reportedly at risk of closure: Double Fine, Ninja Theory, and Complusion Games (South of Midnight), despite a Peabody Award win earlier this year.
• New Xbox boss Asha Sharma praised the Peabody win on social media months before the reported Complusion Games closure.
• Union demands include advance notice, two years recall rights, adequate severance, voluntary severance options, and reassignment to other roles or studios.
• Microsoft said it is working with the CWA to reach an agreement and claimed it respects workers’ right to be heard.
• Speakers said they feel “expendable” and “dispensable.”
• Workers tied console price increases to a component and RAM shortage, arguing Microsoft’s AI spending contributed to the cost pressures.

Cade Onder is a freelancer for IGN’s news team. He covers all things entertainment, including gaming, film, and more. You can find him on Twitter @Cade_Onder.