Amid Mass Layoffs at XBOX, the Fight for Equity in the Video Game Industry Continues

Asha Sharma, the recently appointed CEO of XBOX, sent out a teamwide email on July 6, 2026, that started, “We are beginning the most significant restructure in XBOX history.” What followed was the corporate outline of how “resetting XBOX” would take the company to a more simplified operating model, all at the cost of cutting 3,200 employees throughout FY 2027—including the 1,600 roles that were eliminated the day the email was sent.

In total, roughly 20 percent of XBOX employees are set to lose their jobs. That doesn’t include the other 4,800 jobs the parent-company Microsoft cut because the tech company’s “business is changing because the world is changing,” or so Amy Coleman, EVP and chief people officer, wrote in a Microsoft Corporate Blogs post.

Although the justification for this decision is outlined in Sharma’s email—operating on lower margins and higher production costs—the decision is yet another in the ongoing saga of layoffs in the video game industry. Over the past two years, one-third of video game industry workers were laid off. Well before COVID-19 brought increased interest to the video games industry, there existed poor working conditions, high levels of burnout, and abusive implementation of “crunch:” the term assigned to periods of mandatory overtime to meet deadlines.

Despite this inherent instability, the industry has long thrived (and ballooned) off the work of exploited workers who endure long hours, mistreatment within the workplace, and a pervasive culture of sexual harassment and discrimination.

People who seek to work in game development do so under the belief that the pursuit will allow them a fun, creative workplace. As Alex Speidel told Prism in an interview in 2022, “It’s a passion industry….People get into [the games industry] because they love [gaming], and workers are willing to accept exploitation and low wages because we make the games we love.”

For a $200 billion industry, it might be worth asking why the game industry isn’t stable. It’s one of the few modern industries that has grown, and in a digital age seems primed to thrive. The way Tim Cain, a veteran game developer known for creating Fallout, explained about the industry’s instability:

Game industry is where art meets technology. It is an artistic medium, but it is also a very technological medium. Art itself is inherently unstable because people’s taste change….Tech [is] also inherently unstable, but in a different way. Tech constantly changes…and because of tech changes, your job changes and the relevant skills change.

To Tim, the game industry takes two inherently unstable media and melds them together, creating the recipe for a perfect storm—much in the way that’s coming to pass by way of layoffs.

Despite this inherent instability, the industry has long thrived (and ballooned) off the work of exploited workers who endure long hours, mistreatment within the workplace, and a pervasive culture of sexual harassment and discrimination. While the recent wave of layoffs are nothing new (and are much of the same pattern that has played out over the years), the rise in unionization to protect the rights of the workers is a relatively recent occurrence—one that is growing in popularity as job security falls and corporate exploitation continues.

Another Round of Layoffs

Following the layoffs in July, Microsoft announced another round on September 22, 2026, “eliminating 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer,” as Matt Booty, executive vice president and chief content officer, wrote in his “Continuing Our Reset” email to Team XBOX employees. This is all part of the continued effort to eliminate 3,200 jobs, and XBOX is now three-quarters of the way to achieving this goal.

While the number of positions impacted may seem minor, the scope has significant impact on the viability of studios developing specific projects. Notably, Halo Studios, which took over Bungie’s series Halo. Halo is widely regarded as one of the most successful franchises and one that helped put XBOX in competition against Sony back in 2001. And Halo Studios, as a result of these layoffs, would be greatly reduced and the series baton passed to Activision, the publisher in charge of the Call of Duty franchise. In recent years, Activision faced criticism for predatory monetization tactics and the use of AI to create said paid-for content, as well as longstanding instances of sexual harassment and discrimination lawsuits.

In 2008, Activision merged with Vivendi Games, parent company of Blizzard Entertainment, the publisher best known for Diablo and World of Warcraft, creating Activision Blizzard. By 2021, the company was deep in the news cycle as allegations of a “frat boy” culture, harassment, and discrimination against female employees started coming to light. At the time, according to The Guardian, about “20% of Activision Blizzard’s 9,500 employees are women, and leadership at the company, one of the largest video game makers in the world, is largely white and male.” The California Department of Fair Employment and Housing went so far as to file a lawsuit against the company after a two-year investigation uncovered “widespread sexual harassment, retaliation and discrimination and that the video game maker ‘fostered a sexist culture’ in which female employees earn less than males doing similar work.” This led to hundreds of employees protesting the company both in-person and online.

After the lawsuits accumulated, Microsoft announced its purchase of the company in 2022 for $69 billion—the biggest deal within the gaming industry to date. Lina Khan, the then-FTC chairperson, filed an anti-trust lawsuit. According to The New York Times, “Several senators also asked the FTC to examine the acquisition’s impact on workers.” The UK blocked the deal from initially happening, but Microsoft “leaned on an expansive lobbying and legal operation developed after its yearslong antitrust battle in the 1990s” to flip competitors into allies with private deals that mitigated anticipated regulation concerns, and “brokered an agreement to remain neutral in a unionization campaign by the Communications Workers of America, which initially opposed the deal.” In the end, the strategy worked, paving the way for the acquisition to take place—and the labor neutrality agreement continues to hold, opening the door for unionization efforts to take root.

Amir Satvat, the former business development director at Tencent Games and now a general manager at 1Up Ventures, as well as the founder of Always Supporting the Games Community (ASGC), has worked tirelessly to advocate for and support video game workers. At ASGC, Satvat offers insight for job seekers while cultivating a reputation for tracking and forecasting layoff numbers, especially those that go publicly unreported. In 2025, there were 9,175 layoffs in the video game industry—down from the prior year’s peak of 15,631. By the end of the year, Satvat predicted that around 8,025 jobs cuts would happen in 2026. But following XBOX’s announcement (and layoffs), Satvat’s revised the projection.

As of September, 10,318 layoffs have occurred so far—with the ASGC Games Industry Layoffs Tracker up to 13,800 layoffs for the year. According to the tracker’s “bigger picture” update:

Since [the] first forecast on Jan. 6, 2026 (which projected 8,025 for the year), the projected total has climbed by 72%. The five-year cumulative total (2022–2026P) now stands at an estimated 57,628 layoffs. For context, 2024 remains the peak year at 15,631, but 2026 is already tracking above 2022 (8,500) and 2023 (10,500) and 2025 (9,197) with 16 weeks still remaining in the year.

In 2025, when speaking with The Game Business, Satvat noted that “over 70 percent, and in some years 75 percent, of the layoffs have been in North America.” This is only reinforced by the ASGC tracker showing that 68 percent of layoff events occurred in North America, alone.

A Bleak Industry Outlook

In the annual GDC 2026 State of the Game Industry report, where 2,300 game industry professionals were surveyed, one-in-four were laid off in the past two years. As one game designer from California was quoted, “I’ve been laid off so many times in the last 5-6 years, had so many turbulent issues working in games. I have trauma and can’t ever fully trust anywhere now.” While this may not be a universal sentiment, it is one that has perpetuated throughout the video game industry—particularly for those in contracted roles, such as game testers (also known as quality assurance or QA).

As for the future prospect, students who are pursuing an education within the video game industry are concerned. Out of the students GDC surveyed, 3-in-4 students (74 percent) worry about future jobs. As the survey reported, “students noted the lack of entry-level jobs, increased competition from laid-off workers with more experience, and AI-led displacement (not to mention the rise in AI résumé screening). One person said they’ve been applying for internships for three years now, with no success.”

One student studying game design put it plainly: “There aren’t any jobs. Everyone’s getting fired. It’s fucked.”

This sentiment isn’t limited to only the students. When educators in the industry were asked about whether the current economic and industry climate would impact their student’s future in the game industry, of the 105 respondents, 60 percent said “yes.”

How Unions Can Help

Following the COVID-19 pandemic, alongside the rise in reports of abuse, discrimination, and mistreatment within major studios, a shift occurred. Amid the ongoing job instability, workers within the video games industry are more often than not considering unions as a means to bring about more equitable change in their field. In response to the latest round of XBOX layoffs, CWA’s Campaign to Organize Digital Employees (CODE-CWA) released a statement, calling for solidarity among video game workers:

Today, 268 dedicated video game workers lost their livelihoods as XBOX continues to put profits ahead of the workers who are the heart and soul of the platform’s games. CWA does not expect today’s layoffs to impact union-represented workers.

Earlier this month, CWA members at Blizzard Entertainment secured layoff protections and recall rights in a breakthrough union contract that has the power to set new standards for the industry. Every video game worker deserves the dignity of layoff protections and a voice in shaping their studios for the better.

To those workers left at studios impacted today, and to workers across the industry, our message is simple: Join us. Together we have a stronger voice in shaping our industry into what it ought to be.

While some organizations, such as the United Videogame Workers (UVW-CWA), offer resources such as hardship funds for those impacted by layoffs or the ability organize more effectively in pursuit of unionization, barriers still remain.

Some companies have gone so far as to turn to union-busting tactics to prevent workers from doing so, such as Nintendo, who fired an employee participating in union organizing while claiming it was over a breach of an NDA. Or Raven Software, a studio under Activision Blizzard. According to The Washington Post, employees set out to unionize, but had nine new QA workers brought on board after 12 QA workers were laid off and others transferred to different departments, stifling the union vote—alongside anti-union messages from Raven Software executives.

[S]ome workers fear that unions stifle creativity by introducing restrictions rather than protecting the creativity required for video games to move beyond button pressing—but this is hardly the case.

Despite the continual job cuts, there have been gains worth acknowledging. Consider the 1,900 video game workers who won a contract to unionize that was two years in the making. The contract aims to set an industry-wide standard through workplace benefits, along with increased wages, hybrid workweeks, remote and disability accommodations, and protections for workers around discrimination and mistreatment. This comes years after employees protested Blizzard Entertainment (which is Activision Blizzard) in response to the toxicity that permeated throughout the organization.

The Communication Workers of America representing the employee’s unionization efforts released a statement about the vote, noting that “[p]rior to its acquisition by Microsoft in 2023, Blizzard Entertainment bore a reputation for toxicity, with a highly permissive corporate culture often turning a blind eye to instances of misogyny, homophobia, and racism. Since the purchase, however, the company has seen a stark reversal, rising from the ashes, with positive labor relations playing a central role.” They go on to acknowledge that the collective bargaining agreement is evidence of this want to work with and improve worker conditions within the organization.

The union worked to secure this victory for the workers of Blizzard, but it also extends beyond this single organization, signifying an “unprecedented victory” for the industry as a whole. This is partly due to the scale of the win and the number of workers represented within this case. Unionization in the video games industry is a slow build, partly due to the anti-union sentiment that is pervasive throughout the workforce. Some workers fear that unions stifle creativity by introducing restrictions rather than protecting the creativity required for video games to move beyond button pressing—but this is hardly the case.

While there have been gains in recent years, there is still much work to do—especially to ensure job stability and fair working conditions. In the UK, the IWGB Game Workers union trial against Rockstar—best known for the Grand Theft Auto and Red Dead Redemption series—is underway. Thirty-one union members are set to defend their right to organize after being fired in what is believed to be a union-busting reaction, inspired in part by the work done organizing around Blizzard, which handed employees that massive victory.

As Austin Kelmore, co-founder of the IWGB Game Workers and Game Worker Solidarity, told GameIndustry.biz regarding the rise of unionization in the video game industry: “When Game Workers Unite launched eight years ago, there were hardly any unions or game workers in unions…Since then, workers in more than 130 distinct groups and unions in over 15 countries have organized together to win real improvements in their workplaces. The conversation has shifted from ‘Should the games industry unionize?’ to ‘Which workers are going to unionize next?’”