As layoffs impact Xbox team and its gaming studios, Microsoft cancels 3 upcoming games

Microsoft has announced that it is laying off approximately 9,000 employees, which is around 4 percent of its global workforce. With many of these layoffs impacting the company’s Xbox division as well as other gaming studios, the tech giant is also planning to cancel some upcoming games.

While Microsoft hasn’t clarified how many people were impacted in the Xbox division, the cuts seem to be widespread and significant and happen to be the fourth major layoff in the last 18 months. In January 2024, Microsoft’s gaming division had about 20,000 employees.

As part of the recent layoffs, at least three upcoming video games have been cancelled.  In an internal email published by Variety and later confirmed by Microsoft, Matt Booty, the head of Xbox Game Studios, said, “We have made the decision to stop development of Perfect Dark and Everwild as well as wind down several unannounced projects across our portfolio. As part of this, we are closing one of our studios, The Initiative.”

The Initiative was working on a reboot of the classic FPS series – Perfect Dark. The upcoming sci-fi espionage title has been under development since the studio opened back in 2018. Another title that is now cancelled is Everwild, a game that was under development for more than a decade by Sea of Thieves maker Rare. Founded in 1985 and acquired by Microsoft in 2002, Rare is known for games like Battletoads, Donkey Kong Country, GoldenEye 007, Kinect Sports, Kameo and Banjo-Kazooie.

Zenimax Online Studios, the developer of the popular massive multiplayer online game Elder Scrolls Online, is also impacted by the layoffs. As a result, the studio is also doing away with its upcoming MMORPG game codenamed Blackbird.