Microsoft is rumored to be preparing to make massive layoffs in its gaming division in July, following multiple reports from Bloomberg as well as recent comments from new Xbox CEO Asha Sharma and Chief Content Officer Matt Booty. The Communications Workers of America Union, which represents thousands of video game employees at Microsoft and beyond, is preparing to negotiate employee protections, while calling for transparency from executives and demanding basic dignity for developers.
Sharma and Booty laid the groundwork for the layoffs in early June, with a memo marking the first 100 days of Xbox’s new leadership.
“We found ourselves overwhelmed as we executed changing strategies in a landscape of more readily available content,” the pair wrote. Including Activision’s hotly contested Blizzard King acquisition, which cost Microsoft $69 billion in 2023, Xbox spent more than $89 billion on studio investments and support over the past five years, while the segment’s annual revenue declined by nearly half a billion dollars, the memo said.
“In future this cannot continue,” Sharma and Booty wrote ominously. Bloomberg simultaneously reported that Xbox was planning major layoffs in July, just after the end of Microsoft’s fiscal year. Days later, reports emerged that Xbox was closing or selling three of its studios, Double Fine, Ninja Theory, and Compulsion Games.
In a media call on June 29, CWA sent a clear message to Xbox executives.
“We are here to make it clear: These workers will not be treated as disposable workers,” said Frank Arace, CWA District 9 vice president. He argued that “the money is there” to keep Xbox teams intact, but that executives are funneling it elsewhere without regard for the human or creative impact of layoffs.
UVW-CWA Treasurer Sherveen Uduwana agrees, noting that Microsoft just raised the prices of its consoles for the third time this year and that CEO Satya Nadella personally made $96 million in 2025.
“The gaming industry has no shortage of wealth, especially if we talk about Xbox, Sony, EA,” Uduwana said, concluding that these multi-billion dollar organizations choose not to support their developers.
CWA represents approximately 3,500 workers in the video game industry and its membership continues to grow. In 2023, approximately 300 quality control workers at Microsoft subsidiary ZeniMax Online voted to unionize, forming the largest video game union at the time. Their contract with Microsoft was ratified in June 2025, including minimum salary requirements, a framework for salary increases, and protections around the use of AI. Several Xbox studios have followed suit, including Raven Software and several teams under the Blizzard umbrella, including Overwatch and Diablo workers.
Today, CWA is calling on Xbox executives to come to the negotiating table in good faith and meet workers’ demands for transparency, support and job security.
Four Xbox employees and CWA members shared their experiences working under the lurking threat of sudden layoffs and studio closures. Elder Scrolls Online Encounter designer Morgan Goin lost years of accumulated benefits when Xbox suddenly shut down Arkane Austin, then waited a month before moving some developers to ZeniMax. Even when teams were hitting their goals and executives were raving about their games, Xbox was canceling projects and upsetting studios without warning, Goin said.
Alison Veneto, Blizzard’s senior story editor and franchise developer, said that with each wave of layoffs, affected studios lose incredible talent as well as years of institutional knowledge. She added that it’s difficult to be creative with layoffs constantly looming and no set rules dictating how mass layoffs should play out.
“Work with us,” Veneto said, speaking directly to Microsoft. “Adopt meaningful layoff protections.”
A common refrain was that Microsoft had shown little interest in negotiating with its unions, failing to pay proper attention to meetings and leaving proposals on the table for months. Unions representing workers at ZeniMax and other Microsoft studios have managed to secure some protections for all Xbox developers, but the basic framework around layoffs and studio closures still requires serious, good-faith attention, according to CWA.
“We’re done paying for leadership failures,” said Activision QA tester Andrew Snell.
