Xbox reportedly plans three more rounds of layoffs, with the first wave arriving as early as this month

Xbox is reportedly bracing for three more rounds of layoffs as Microsoft’s gaming division continues CEO Asha Sharma’s plan to reset the company. According to a new report, the first will take place this month, followed by another in November and another in January 2027.

That’s according to “people familiar with the plans,” who revealed it to Fortune magazine in a new report also profiling Sharma. Plans could change, however, the people said.

If true, it would be the second round in as many months, following September’s which saw the elimination of 268 roles alongside organizational changes that moved Obsidian under Bethesda, with Rare and World’s Edge joining Activision.

The layoffs are part of what is seen as the second major wave of Xbox’s broader plan to cut costs and return the division to profitability. The first wave was by far the largest. It took place in July and resulted in the loss of more than 1,600 jobs. The remaining 1,600 are expected to be spread over the next few quarters, peaking in the first months of 2027.

With this latest report, we now know when these remaining reductions will take place. The report offers no insight into which teams are in Sharma’s crosshairs, given the mass cuts that have already taken place at his biggest and most iconic studios.

One of the biggest remaining question marks, however, concerns the fate of Gears of War: E-Day studio The Coalition. The Canadian first-party studio has just released the third-person shooter with sales that seem lower than expected.

Eurogamer spoke with members of The Coalition’s development team as they prepared to release E-Day, and it’s clear that there is widespread concern that Xbox will reduce studio staff now that their latest project has shipped. Many also fear that the cuts will be timed in a way that prevents potentially laid-off people from receiving promised bonuses.

It’s already mid-October, so if the reports are accurate, the bad news will likely be announced this week or next week. The same report also revealed that Xbox internally estimates that next-gen Helix consoles will cost between $1,200 and $1,800.