Microsoft has dismissed speculation that Xbox chief Phil Spencer plans to retire "anytime soon," following widespread rumors about his future at the company in the wake of major layoffs announced yesterday.
Approximately 4% of Microsoft's workforce, or just over 9,000 employees, were let go. While most cuts occurred outside the gaming division, Xbox studios were significantly impacted. For instance, Rare's Everwild and the Perfect Dark reboot were canceled, and The Initiative was shut down.
Other divisions were also affected. Candy Crush maker King and Bethesda's European operations saw substantial job losses. An unannounced MMO from ZeniMax Online Studios, the developer behind The Elder Scrolls Online, was canceled and its team was cut. Veteran ZOS head Matt Firor also stepped down. Reports further indicate layoffs at Forza developer Turn 10 and several studios working on Call of Duty.
Amid this turmoil, Call of Duty insider @TheGhostOfHope claimed that Spencer—who has faced criticism for recurring layoffs since Microsoft's $69 billion acquisition of Activision Blizzard—was set to retire as CEO after the launch of the next-generation Xbox, with current Xbox President Sarah Bond slated to succeed him.
However, Microsoft has issued a statement suggesting Spencer will remain in his position for the foreseeable future. In a comment to The Verge, Kari Perez, Head of Xbox Communications, stated: "Phil is not retiring anytime soon."
It is important to note that Microsoft's rebuttal uses vague language and does not directly refute the specific claim. The phrase "anytime soon" refers to an undefined period. Does "soon" mean this year, next year, or 2027?
Microsoft is reportedly targeting a 2027 release for its next-gen Xbox, though plans could shift. What is clear is that Spencer has presided over a series of severe workforce reductions since successfully navigating the Activision Blizzard acquisition through legal channels. Microsoft laid off 1,900 staff in January 2024, followed by further cuts with the closure of Redfall developer Arkane Austin and Hi-Fi Rush developer Tango Gameworks just months later. In September 2024, an additional 650 jobs were cut from the gaming business. Then, in May of this year, Microsoft eliminated a staggering 6,000 positions, representing about 3% of its total workforce.
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In a June 2024 interview with IGN, Xbox head Phil Spencer commented: "I must run a sustainable and growing business within the company, which sometimes forces me to make difficult decisions—choices I frankly do not enjoy, but that someone has to make."
So, what is next for Microsoft? All games featured during the June 2025 gaming showcase are reportedly secure for now, as are the studios developing them. The company has announced a major presence for gamescom in August, where it is expected to showcase its upcoming lineup.
