Xbox Games Cancelled as Microsoft Slashes 9000 Jobs
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Microsoft has reportedly cancelled Everwild, an in-development game from UK-based Sea of Thieves developer Rare, and potentially other projects amid a round of layoffs that will see the company lose upwards of 9000 employees.
The layoffs were first reported by Bloomberg, which revealed that 10% of staff at Candy Crush developer King – recently purchased by Microsoft alongside Activision and Blizzard – were set to be laid off. Further reporting from the outlet revealed that 9000 employees would be laid off at the software giant, with many of those layoffs coming from within the Microsoft Gaming and Xbox banner.
Four characters look up at a picture of a deer drawn in the night sky with magical lights in a 2020 trailer for Everwild.
Four characters look up at a picture of a deer drawn in the night sky with magical lights in a 2020 trailer for Everwild.
Microsoft
In a memo to Xbox staff obtained by IGN, Microsoft Gaming CEO Phil Spencer said the company would "end or decrease work in certain areas of the business" in an effort to "increase agility and effectiveness."
The full memo can be read here, courtesy of IGN:
Today we are sharing decisions that will impact colleagues across our organization. To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft's lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today's notifications and any organizational shifts will be shared by your team leaders in the coming days.
I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger. The success we're seeing currently is based on tough decisions we've made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities. We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come.
Prioritizing our opportunities is essential, but that does not lessen the significance of this moment. Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted. These decisions are not a reflection of the talent, creativity, and dedication of the people involved. Our momentum is not accidental — it is the result of years of dedicated effort from our teams.
HR is working directly with impacted employees to provide severance plan benefits (aligned with local laws), including pay, healthcare coverage, and job placement resources to support their transition. Employees whose roles were eliminated are encouraged to explore open positions across Microsoft Gaming, where their applications will be given priority review.
Thank you to everyone who has shaped our culture, our products, and our community. We will move forward with deep appreciation and respect for all who have contributed to this journey.
Phil
Bloomberg reporter Jason Schreier also confirmed on Bluesky that Rare's project Everwild had been cancelled, saying that the news is "coming in drips" and to expect more news of project cancellations and job cuts in the coming hours and days.
The full scale of today's Xbox layoff is not yet clear, but you can expect more news of project cancelations and job cuts as the U.S. west coast wakes up. Some studios are planning meetings within the next two hours. — Jason Schreier (@jasonschreier.bsky.social) 2025-07-02T14:42:49.219Z
It comes after multiple rounds of layoffs for the software and gaming giant, with over 6000 employees laid off from the company earlier this year in May. The company similarly laid off 10,000 employees in January 2023.
Everwild started development in 2014, and was officially revealed in November 2019. The game was said to be a third-person action-adventure game, with multiple high profile creatives taking on leading roles in the game's development. The game was reportedly scheduled to launch in 2023, before being rebooted and entering development hell, although comments from Spencer in 2024 suggested the game was still on track for a release.
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