Industry Reacts to Xbox Layoffs
Developers decry Microsoft’s “colossal waste of talent” after mass job cuts.
Microsoft’s recent layoffs at Xbox Games, which affected over 9,000 employees and led to project cancellations, have sparked widespread condemnation. Industry figures mourn the loss of experienced talent, as critics question the company’s priorities.
Industry Veterans Speak Out
Many are sharing their sentiments online, including Eric Neustadter, current Vice President of Technology at The Pokémon Company and former Operations Manager for Xbox Live. He posted “It’s heartbreaking to watch what’s happening to this industry that I love. The incentives are misaligned so strongly that fun games and profitable teams aren’t what matter.”
Former IGN writer Mitch Dyer, who has contributed to titles like Star Wars: Squadrons and Gotham Knights, echoed this view. Dyer stated, “Unreal that CEOs can layoff almost 20,000 people in a year but keep their jobs — an absolutely disgraceful display of leadership at Microsoft”
My heart breaks for my friends at Microsoft affected by today’s layoffs. Truly beyond words. If you can, please help share the work of those impacted as you come across it, as well as potential job opportunities.
— TONY GRAYSON 💥 (@tonycomputerentertainment.com) July 2, 2025
Tony Grayson, creator of Antonblast and Antonball, shared his empathy for those affected, “My heart breaks for my friends at Microsoft affected by today’s layoffs. Truly beyond words.”
Similarly, John Elper, formerly a BioWare writer and narrative director on skate., expressed his dismay, describing the current state of the industry as “the grimmest”
it has been.
In 2024, the video game industry saw over 10,000 layoffs, marking a significant increase compared to previous years (Video Games Chronicle).
Concerns Over Microsoft’s AI Investments
Criticism has mounted regarding Microsoft’s increasing investments in AI technology amid these layoffs. Andrew Carl, current Senior Systems Designer at Respawn and former Blizzard employee, highlighted the timing of the “carnage” alongside the company’s AI push.
Reminder that all this carnage at Microsoft is coming at the same time as they are financially doubling down on the agentic & generative AI slop that nobody wants because it lies to you, has terrible security issues, & has untenable energy costs.
Chandana Ekanayake, Dosa Divas director and co-founder of Outerloop Games, criticizes the industry’s cycle of layoffs followed by renewed hiring and acquisitions, stating that “Making numbers go up forever is not sustainable and never was.”
On the smaller team side of the industry, you have teams that are having to shut down or layoff due to lack of funding or not being able to sign new projects. It feels like two different realities.
The industry faces a challenging period as more information surfaces about the recent layoffs and game cancellations. The call to support beloved games and creators resonates strongly during this time.
