Xbox is reportedly preparing to cut hundreds of jobs this week in its second major round of layoffs this year, with plans to consolidate several game studios under the current restructuring.

The Information, citing a source briefed on the plans, reports that the cuts follow July's elimination of 1,600 roles, part of a broader target of 3,200 Xbox positions by the end of Microsoft's fiscal year. Xbox CEO Asha Sharma has focused the unit on higher-margin big franchises like Elder Scrolls and Fallout while reducing smaller acquired studios. Blizzard, which was largely spared in the first wave, now faces reports of imminent cuts according to Bloomberg's Jason Schreier, who stated on the 8-4 Play podcast that "the Blizzard layoffs are coming and imminent" days after BlizzCon 2026 announcements including Diablo V targeted for 2029 and a new open-world StarCraft shooter for 2030.

Studio consolidation details remain unspecified, though insider chatter suggests reorganizations such as moving Halo under Activision Blizzard King and other shifts across publishing arms. Morale was already low after July's cuts across Bethesda, ZeniMax Online, id Software, and others, with some studios like Double Fine and Compulsion returning to independence.

No official confirmation has come from Microsoft or the affected teams as of the latest reports.