Microsoft has begun its second major round of layoffs in 2025, and around 9,100 people are expected to lose their jobs. This round of departures follows one in May 2025, which resulted in 6,000 people being out of work, and another in early June, where a further 300 people were let go.
Writing for Bloomberg, Jason Schreier explained last week that a major round of layoffs was expected to hit the company today (Wednesday, July 2, 2025), and has since followed up with the outcome of events.
Candy Crush creator King is expected to lay off around 10% of its staff, or approximately 200 people, according to the report. Layoffs are being announced in waves, and the final studios to be affected are not yet known.
Banjo Kazooie developer Rare has also reportedly seen cuts, and the long-awaited game Everwild has apparently been cancelled, according to Schreier. Everwild reportedly began development back in 2014, but is rumoured to have had a complete reboot partway through development, as in 2021, the leads of the project were replaced with veteran Rare developer Gregg Mayles and Alien Isolation’s lead designer, Gary Napper.
As recently as October 2024, Xbox head Phil Spencer posted on Threads about a visit to Rare, where he went hands-on with Everwild, calling it a “great day”.
As reported by The Verge, Spencer sent an internal memo to employees detailing how the company has “never looked stronger”, but that the layoffs are for “continued success in future years”. A section of the memo reads:
“I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger. The success we’re seeing currently is based on tough decisions we’ve made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities. We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business.”
Schreier also claims that the next MMORPG project from Zenimax Online, the studio behind Elder Scrolls Online, has been cancelled due to the layoffs. “The project, code-named Blackbird, had been in development since 2018.”
Zenimax employees were reportedly locked out of their Slack accounts “abruptly” with no word from HR on the future of their role within the company.
Cancelled Xbox Studio Games
- Everwild
- Perfect Dark
The story continues to develop, and we’ve reached out to Microsoft and the development teams involved for comment.
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