Microsoft Lays Off 268 Xbox Employees in Washington State as Part of Broader 500–600 Person Reduction

NewsData.io · United States · Sep 22, 2026

Microsoft is cutting 268 Xbox employees in Washington state as part of a broader reduction affecting 500 to 600 workers, including studio reorganizations bringing World's Edge, Rare, and the next Halo title under Activision. The action is part of a previously announced 3,200-person downsizing initiated in July, driven by unsustainable margins in the gaming division. Despite the cuts, Microsoft states it continues to hire across other parts of the company. Staffing firms serving the tech and gaming sectors in the Pacific Northwest should anticipate increased candidate flow from this displaced workforce.