Xbox layoffs: What’s next for the video game giant?

Layoffs in the video game industry have been commonplace since 2022, with estimates suggesting nearly 58,000 roles have been cut , externalworldwide.

Much of this is down to over-hiring and aggressive expansion around 2020, when the Covid-19 pandemic sparked a massive boom in player numbers and spending.

During this period, Xbox bought up multiple studios and publishers.

Among its biggest purchases were ZeniMax/Bethesda, owner of the hugely popular The Elder Scrolls and Fallout series, and Call of Duty maker Activision Blizzard, which it purchased for $69bn (£56bn) in 2023.

Video games remain profitable, but the cost of producing them has skyrocketed.

Cost-of-living crises, customer habits and rising hardware costs blamed on massive investment in AI have all had an effect on the market.

When Sharma’s memo landed in early June, some staff, including Autumn Mitchell, started to worry.

“People are reading in between the lines’,” says the former senior quality assurance tester at ZeniMax.

“Does it mean me? Does it mean them? Does it mean my project? Does it mean my studio?”

Mitchell is one of four Xbox developers BBC Newsbeat spoke to who lost their jobs in the latest cuts.

All of them are members of studio unions affiliated with the Communication Workers of America union (CWA).

They say requests for information were met with a “deafening silence” in the weeks between Sharma’s original memo and the eventual layoffs.

“What we were left with was just a lot of uncertainty for about a month,” says Goin, who sits on ZOS’ bargaining committee – a panel of union members that represents workers at the studio.

Simon Prefontaine, a game designer at Bethesda Game Studios’ Montreal office, says his studio works on “core franchises” such as Fallout and The Elder Scrolls.

“We’re expecting maybe a few of us might get hit, we’re probably pretty safe,” he says.

“We did not expect the scale of layoffs that we have here.

“We’re stunned.”