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Author: BrooklynReading:6
Microsoft has confirmed that Xbox head Phil Spencer is not planning to step down "anytime soon," despite speculation about his future at the company after yesterday's widespread layoffs.
Approximately 4% of Microsoft's global workforce, amounting to more than 9,000 employees, were let go. Although most job cuts occurred outside the gaming division, multiple Xbox studios were significantly affected. For instance, Rare's Everwild and the Perfect Dark reboot were both canceled, and The Initiative was shut down.
Candy Crush creator King and Bethesda's European offices also faced major staffing reductions. An unannounced MMO from ZeniMax Online Studios, the team behind The Elder Scrolls Online, was canceled and its developers laid off. Veteran ZOS director Matt Firor also departed. Reports also point to layoffs at Forza developer Turn 10 and various Call of Duty studios.
Amid the turmoil, Call of Duty insider @TheGhostOfHope claimed that Spencer—who has faced criticism for ongoing layoffs across Microsoft's gaming operations since the $69 billion Activision Blizzard acquisition—was preparing to retire as CEO after the launch of the next-generation Xbox. Current Xbox President Sarah Bond was said to be his replacement.
Microsoft, however, issued a statement indicating Spencer will remain in his position for the foreseeable future. Kari Perez, Head of Xbox Communications, told The Verge, “Phil is not retiring anytime soon.”
It's important to highlight that Microsoft’s response is somewhat ambiguous and doesn't directly counter the original claim. The phrase “anytime soon” leaves room for interpretation—does it refer to this year, next year, or perhaps 2027?
Microsoft is rumored to launch its next-gen Xbox in 2027, though plans could shift. What we do know is that Spencer has overseen a series of painful cuts since successfully navigating the Activision Blizzard purchase through legal channels. Microsoft eliminated 1,900 positions in January 2024, followed by additional cuts months later with the closure of Arkane Austin, developer of Redfall, and Tango Gameworks, creator of Hi-Fi Rush. In September 2024, the company let go of another 650 employees from its gaming teams. By May of this year, Microsoft had cut a staggering 6,000 jobs, roughly 3% of its total headcount.
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In a June 2024 interview with IGN, Xbox chief Phil Spencer stated: “I have a responsibility to maintain a sustainable and growing business within the company, which sometimes forces me to make difficult choices—choices I don’t enjoy making, but which are necessary.”
So, what’s next for Microsoft? All the titles showcased during the June 2025 gaming showcase are reportedly safe for now, as are the studios behind them. The company has announced a major presence at gamescom this August, where it’s expected to highlight upcoming releases.
