Jason Schreier: Major Xbox layoffs expected June 30

Reporter Jason Schreier posted a roughly 30-minute video saying large layoffs are expected at Xbox at the end of Microsoft’s fiscal year on June 30. He identified Compulsion Games, Double Fine and Ninja Theory as studios currently in negotiations and at risk.

Schreier said those talks could result in studios being spun off or sold to other buyers rather than being immediately closed, but he also warned that many teams are in precarious positions. He confirmed the three studios and indicated additional teams face trouble.

He said the cuts will affect the wider Xbox organization and described the outlook as severe. The expected timing is tied to the company’s fiscal year end on June 30, according to his report.

Schreier used a direct description of the mood inside the company: “What’s happening is going to be pretty brutal. The word ‘bloodbath’ has been thrown around among people that I talk to who know what’s happening. It’s going to be bad.” He emphasized the scale could extend beyond the studios named.

He clarified that it is not “entirely true” to say studios are being shut down right now, because many are still negotiating options. Those options include potential spin-offs or sales to other buyers.

Schreier also flagged long-term uncertainty within Xbox Game Studios, noting it is “very hard to make great art when you are working under fear of layoffs and turbulence and shutdowns.” He tied the current round of cuts to a history of internal challenges at the publisher.

Schreier said his report is based on sources and that the situation is still unfolding. Microsoft and Xbox have not publicly confirmed the full scope of the layoffs or which studios will be affected. Additional reporting and formal announcements are expected as the fiscal year end approaches.