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Microsoft cut roughly 300 more jobs in Washington state on Tuesday, Sept. 22, 2026, the latest round in a Xbox restructuring that has now eliminated close to a thousand Redmond-area positions since summer. The company confirmed 268 of the cuts fell inside Xbox Game Studios worldwide, hitting management, operating roles and staff at first-party studios including Halo Studios, according to KIRO 7 and GeekWire.
Redmond bears the brunt, again
This is the second Microsoft layoff to hit the Eastside in three weeks. A Worker Adjustment and Retraining Notification filed with Washington’s Employment Security Department put the earlier round at 605 jobs statewide, effective Sept. 4: 493 of them based directly on the Redmond campus, the remaining 112 spread across remote Puget Sound roles, according to state WARN filings reviewed by KUOW and GeekWire.
Tuesday’s cuts are separate from that Sept. 4 filing and bring the total announced Xbox reductions since July past 900 in Washington alone. Microsoft has not filed a new WARN notice specific to Tuesday’s 300 as of this writing; the company disclosed the number directly to reporters.
How this fits the year’s cuts
The layoffs trace back to a July 2026 announcement that Microsoft would eliminate about 3,200 Xbox roles — roughly 20% of the division — by the end of its fiscal year, part of a broader global cut of 4,800 positions announced that month. Xbox Chief Content Officer Matt Booty framed the latest move as an effort to “strengthen our franchises and games by operating fewer business units,” according to GeekWire. Microsoft says the July-to-September restructuring is now about 75% complete.
The cuts follow Microsoft’s 2025 reductions of more than 15,000 positions company-wide, including a 6,000-job round in May and a 9,000-job round in July of that year.
Studios change hands
The restructuring is reshaping who makes Microsoft’s biggest franchise. World’s Edge and Rare are moving under Activision’s banner, and development of the next mainline Halo title shifts to Activision as well — a break from the nearly 25-year run of Halo games built inside Microsoft’s own studios in Redmond. Halo Studios, formerly 343 Industries, will keep a reduced team focused on existing games, community operations and esports, GeekWire reported.
Activision President Rob Kostich said the publisher is assembling a “purpose-built team, unique in capability and talent” to carry the franchise forward, a team GeekWire reports will operate separately from the Call of Duty studio structure.
Xbox CEO Asha Sharma told staff, per KUOW’s reporting, that “our business today is not healthy,” citing operating margins she said run three to ten times lower than comparable platform and publishing businesses — part of the rationale Microsoft has offered for consolidating studios rather than running Halo, World’s Edge and Rare as separate units.
What Microsoft says about AI’s role
Chief People Officer Amy Coleman told reporters the eliminated roles “are not being replaced by AI,” even as she said “AI is changing how work gets done” and that Microsoft is “changing because the world around it is changing.” Chief Communications Officer Frank Shaw said the latest round hit “a broad swath” of employees rather than a single targeted team, KUOW reported.
The Eastside labor math
Microsoft remains King County’s largest single employer, anchoring the office and retail economy in Redmond and radiating hiring and spending into Bellevue, Kirkland and Sammamish. The company says it has offset some of the losses with roughly 850 university hires who started at the end of August, 1,300 summer interns, and more than 4,000 employees redeployed into other roles. A voluntary buyout was also offered to about 9,000 employees earlier this year; Microsoft says roughly 30% accepted.
None of those offsets change the count for the roughly 900 Washington employees whose Xbox-related positions have ended since Microsoft’s July announcement, or what it means for the commercial leases, restaurants and contractors around the Redmond campus that scale with Microsoft’s headcount. The company has not said whether further Xbox cuts are expected before the restructuring plan’s stated completion.
