Xbox cancels Perfect Dark and Everwild as Microsoft makes 9,000 people redundant

(Credit: Microsoft)

• 😢 Microsoft has announced another set of large-scale redundancies affecting every sector of its business

• 😖 It amounts to 9,000 jobs, or around four percent of their global workforce

• 👎 The Xbox gaming division has been hit hard, with The Initiative studio that was behind Perfect Dark has been closed, and layoffs have also affected Turn 10, King and ZeniMax Media

• 📉 These layoffs take the total headcount down at Microsoft by 15,300, including other redundancies earlier this year

Microsoft has announced that they are laying off more staff in another round of redundancies, and also announced the cancellation of Perfect Dark and Everwild.

Perfect Dark bookended Microsoft’s Xbox Games Showcase last year, and was first announced in 2020. Similarly, Everwild was announced in November 2019, and Xbox head Phil Spencer said the game was progressing last February.

"I was recently out at Rare. It's nice to see the team with Everwild and the progress that they're making," Spencer said at the time. "It has been [a while]. And we've been able to give those teams time in what they're doing which is good and still have a portfolio like we have.

"It's like a dream that Matt [Booty] and I have had for a long time, so it's finally good to be there. We can give those teams time."

As reported on by various outlets, including Windows Central, the Redmond-based firm is laying off around four percent of its global workforce, with cuts affecting every sector of the business that spans various "levels, teams, geographies and tenure".

Moreover, according to a statement released to various press, Microsoft noted these layoffs were "organizational and workforce changes that are necessary to position the company and teams for success in a dynamic marketplace."

It appears that the Xbox gaming division is one of the areas that has been hit the hardest, with a studio being shuttered and games cancelled as a result.

As per documents seen by The Verge, Matt Booty, president of game content and studios at Xbox, revealed that both The Initiative, the studio behind Perfect Dark, has been closed. In addition, Rare IP Everwild has been canned, as well as some unannounced projects.

Turn 10 Studios, the Forza Motorsport developer, has also been gutted. More than 70 people – reportedly around half of the studio's workforce – are being let go, according to a source speaking to The Verge, in a decision that has hit the "vast majority" of the studio. It is reportedly leaving just enough people to keep Forza Motorsport up and running, according to their report.

Microsoft is also reportedly laying off 10 percent of the workforce at mobile developer King – best known for the Candy Crush games – with a Bloomberg report noting a 10 percent cut in staff that approximates to 200 jobs.

Moreover, there have been cuts to ZeniMax Media – makers of the Fallout series – with those affected in their London, UK-based marketing team, and in Rockville, Maryland, according to Windows Central. We aren't too sure on the scale of the layoffs here just yet, although we do know that ZeniMax Online Studios' new IP has also been cancelled as part of this round.

According to Insider Gaming, multiple studios at Activision working on the Call of Duty franchise, including Raven Software and Sledgehammer Games, are also impacted by these layoffs.

These most recent layoffs are not the first to have affected Microsoft staff this year, with reductions in both January and May 2025, which, combined with this July round, have taken the total reduction in headcount to 15,300 people, or 6.7% of Microsoft's global workforce.

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Reece Bithrey is a journalist with bylines for Trusted Reviews, Digital Foundry, PC Gamer, TechRadar and more. He also has his own blog, UNTITLED, and graduated from the University of Leeds with a degree in International History and Politics in 2023.