We at NerdLeaks have been following fresh claims about internal shake-ups at Xbox, and the latest report is sharp enough to make any insider sweat. Per Eurogamer, which is relaying information from "people familiar with the plans" who spoke to Fortune Magazine, Xbox is allegedly preparing three more rounds of layoffs — with the first said to be taking place this month, another in November, and a final one in January 2027. Take this with a pinch of salt, but if true, this would be a major continuation of the restructuring already underway under Asha Sharma's reset plan.
What Was Reported
Per Eurogamer, the claimed timetable breaks down as three discrete waves: one happening this month, a second in November, and a third in January 2027. Sources told Fortune Magazine these plans could change. The report places these potential fresh cuts alongside earlier reductions that have already hit Xbox hard:
- September's round eliminated 268 roles and came with organisational shifts that moved Obsidian under Bethesda, and shifted Rare and World's Edge into Activision.
- The July round — described as the largest — reportedly cut over 1,600 jobs.
- Eurogamer says the remaining 1,600 planned cuts are meant to be distributed across future quarters, culminating in the early months of 2027.
The report also highlights particular anxiety around The Coalition following the release of Gears of War: E-Day, which has allegedly seen softer-than-expected sales. Eurogamer spoke to members of The Coalition's development team preparing to ship Gears of War: E-Day, and those developers reportedly fear layoffs could be timed to affect eligibility for promised bonuses.
The Source & Credibility
Eurogamer's piece attributes the details to "people familiar with the plans" who spoke to Fortune Magazine. That same coverage reportedly included a profile of Asha Sharma, and Eurogamer was careful to note that the plans "could change." We therefore have a second-hand relay: sources to Fortune, Fortune relayed via Eurogamer to the public.
We should flag a couple of credibility points right away:
- Those quoted are unnamed insiders — described as "people familiar with the plans" — so attribution is limited.
- Eurogamer explicitly warns that "plans could change," and Fortune's involvement means we are relying on reporting cascaded through outlets.
- Eurogamer also notes timing expectations, writing that "we're well over halfway through October, so if the information is accurate, the bad news is likely to be announced this week or next." That suggests the claim is time-sensitive and verifiable in the very near term.
All of which means we should be sceptical, but also prepared: if these waves hit as described, the implications would be immediate and far-reaching.
What It Could Mean
If Eurogamer's account is accurate, Xbox would be extending the cost-cutting and restructuring campaign it began earlier this year. The reported plan to distribute the remaining 1,600 planned cuts across future quarters and into early 2027 would keep personnel uncertainty in the division for months to come. The reported organisational changes already executed in September — moving Obsidian under Bethesda and reshuffling Rare and World's Edge — show the company is willing to reassign studios as part of the reset.
Concerns voiced to Eurogamer by staff at The Coalition over Gears of War: E-Day sales and bonus timing are notable. If layoffs follow softer-than-expected performance, studios that recently shipped live projects could be particularly exposed. The report also includes a striking hardware claim: Xbox is internally estimating next-gen Helix consoles to cost between $1,200 and $1,800. If that internal estimate is accurate, it may be one of the factors driving a push back toward profitability, per the coverage.
We should again stress "if true" — the exact teams affected are not named in the report, and Eurogamer says it does not have details about which groups are in "Sharma's crosshairs."
Why This Matters
Allegations of more layoffs at Xbox go beyond headcount numbers — they touch on studio stability, project roadmaps, and morale across first-party teams. For developers who just shipped games like Gears of War: E-Day, the threat that cuts might be timed around bonus eligibility is especially worrying. We also know from Eurogamer's relay that Microsoft is attempting to return Xbox to profitability under Xbox CEO guidance, and that this plan reportedly includes further workforce reductions and internal hardware cost estimates.
We will be watching for confirmation or denials as the alleged windows approach. For now, take the details with a pinch of salt: the claims come via anonymous sources to Fortune and are being relayed by Eurogamer, and the outlets themselves note plans could change. Still, if even part of this reporting proves accurate, Xbox's first-party landscape could look significantly different by early 2027.
