Rumor has it that Microsoft is gearing up to lay off more people from its gaming division this July, following multiple reports Bloomberg and recent comments made by new Xbox CEO Asha Sharma and Chief Content Officer Matt Booty. The Communication Workers of America Union, which represents thousands of video game workers at Microsoft and beyond, is preparing to negotiate to protect workers, while demanding transparency from management and 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 overextended as we implemented change strategies in an easily accessible content environment,” the pair wrote. Including the hard-fought acquisition of Activision Blizzard King, which cost Microsoft $69 billion by 2023, Xbox spent more than $89 billion on investment and studio support over the past five years, while annual revenue fell by nearly half a billion dollars, the memo said.
“Moving forward, this cannot go on,” Sharma and Booty wrote, alarmingly. Bloomberg at the same time it reported that Xbox was planning major layoffs in July, shortly after the end of Microsoft’s fiscal year. A few days later, reports surfaced that Xbox was closing or selling three of its studios, Double Fine, Ninja Theory and Compulsion Games.
During a press conference on June 29, CWA gave a clear message to Xbox leadership.
“We’re here to make this clear: Those workers will not be treated like trash,” said CWA District 9 Vice President Frank Arace. He pointed out that “the money is there” to keep the Xbox teams strong, but executives are doing it elsewhere without regard to the human or creative impact of the layoffs.
UVW-CWA Treasurer Sherveen Uduwana agreed, noting that Microsoft just raised its prices for the third time this year, and CEO Satya Nadella is personally making $96 million by 2025.
“There is no shortage of wealth in the gaming industry, especially when we talk about Xbox, Sony, EA,” said Duduana, concluding that these multi-billion dollar organizations choose not to hire their developers.
The CWA represents approximately 3,500 workers across the video game industry and its membership numbers continue to grow. In 2023, nearly 300 QA employees at Microsoft subsidiary ZeniMax Online voted to unionize, creating the largest video game union at the time. Their contract with Microsoft was approved in June 2025, including minimum wage requirements, a framework for wage increases and safeguards around the use of AI. Many studios across the Xbox have followed suit, including Raven Software and several teams under the Blizzard umbrella, including the Overwatch and Diablo crew.
Today, the CWA is calling on Xbox executives to sit down at the negotiating table in good faith, and respond to workers’ demands for transparency, support and job security.
Four Xbox employees and CWA members shared their experiences working under the subtle threat of sudden layoffs and studio closures. Elder Scrolls Online designer Morgan Goin lost years of accrued profits when Xbox suddenly shut down Arkane Austin then waited a month before transferring other developers to ZeniMax. Even when teams were hitting their metrics and executives were ramping up their games, Xbox canceled projects and shook up studios without warning, Goin said.
Blizzard news editor and franchise developer Alison Veneto said that with each round of layoffs, the studios involved lose incredible talent and years of institutional experience. He also added that it is difficult to be smart about the constant killing of people and there are no set rules that dictate how mass shootings should play out.
“Work with us,” Veneto said, speaking directly to Microsoft. “Adopt reasonable defenses to layoffs.”
A common refrain is that Microsoft has shown little interest in negotiating with its unions, failing to pay close attention to meetings and leaving proposals on the table for months at a time. Unions representing workers at ZeniMax and other Microsoft studios have successfully won some protections for all Xbox developers, but the basic framework around layoffs and studio closures still needs serious attention, in good faith, according to the CWA.
“We’re done paying for management failures,” said Activision QA tester Andrew Snell.
