The latest rumours pointed to a cessation of collaboration with third-party companies. This would have resulted in the first layoffs at Xbox.
Microsoft’s gaming division is going through a difficult period. Xbox has been the subject of doubt for months, but the situation has worsened after the cancellation of E3. Although it delivered a phenomenal Summer Game Fest 2026, the company has been plagued by rumours and hints about layoffs and studio closures that, so far, have not materialized. Amid this uncertainty, the latest rumour suggested that the American company had curbed collaborations with third-party companies, which would have led to the first layoffs associated with Xbox. This speculation has been denied, though not officially.
We have to go back to last week when, during Episode 59 of The Business of Video Games podcast, hosted by Fernando Rizo and Shams Jorjani, CEO of Arrowhead Game Studios, Rizo mentioned hearing companies in the industry claim that Xbox had completely halted any collaboration with third-party studios to include their games in Game Pass. This statement logically pointed to one of the consequences of the company’s restructuring.
Subsequently, Jason Schreier, a Bloomberg journalist and one of the outlet’s most reliable sources, stepped in to clarify the situation. While Schreier himself stated that the Redmond-based company had already begun “terminating contracts and reducing its staff of external vendors,” including those from a public relations agency, he later corrected his initial statement and asserted that the layoffs associated with the rumour were not related to Xbox.
“Correction: Today’s layoffs were part of an agency-wide reorganization and were not related to the termination of contracts with Xbox. Staff from the Xbox account were let go, but the agency continues to work with Xbox, I’m told,” the journalist added on his personal Bluesky account.
It’s worth noting that neither Microsoft nor Xbox has issued official statements regarding this debunked rumour or these potential layoffs, nor about the true scope of their reorganization plans. In fact, Schreier’s correction only affects this first round of layoffs, so it remains unclear whether contracts with third-party companies have truly been frozen.
News of Layoffs at Xbox Is Expected to Arrive in July
What is known is that news of layoffs and studio closures would begin in July. Schreier himself stated in his initial post about this rumour that “the massive wave of layoffs will not occur until after Microsoft Corporation closes its fiscal year,” a closing that takes place today, June 30.
Source: 3DJuegos
