Microsoft employees who are members of unions represented by the Communications Workers of America spoke out against management and the pending layoffs at the Xbox division today.
In an online call with the press, CWA District 9 vice president Frank Arce opened the call by confirming that the union expects Microsoft to initiate layoffs in the Xbox division, but he noted that the union now represents more than 3,500 employees at Microsoft and the company should not be treated as disposable. Those workers have unionized since 2022, and since that time Microsoft has had multiple layoff events.
“Multiple reports in the press indicate that in days ahead Microsoft may initiate layoffs across its Xbox division, the very people who build its best-selling games. We’re here to say this plainly: those workers will not be traded as disposable,” Arce said.
Rumored Xbox layoffs
For context, everyone is bracing for more layoffs.
Asha Sharma, who was appointed CEO of Xbox earlier this year to replace longtime Xbox CEO Phil Spencer, has said that Xbox needs to “reset” in part because it has seen revenues decline even after $20 billion of acquisitions — not counting the $68.7 billion acquisition of Activision Blizzard — and that its “accountability margin” has slipped to 3%.
Bloomberg reported earlier that Microsoft is preparing to close multiple game studios if there are no buyers found. And we hear that Microsoft is preparing to take action in early July, just after the close of the financial quarter on June 30.
It’s possible some of the studio jobs will be saved if a buyer is found for any one of the four studios: Double Fine Productions (Kiln, Keeper), Undead Labs (State of Decay), Compulsion (South of Midnight), and Ninja Theory (Hellblade/Senua).
At the least, hundreds of jobs are at stake. Double Fine Productions could lose 100 jobs if it is shut down. Undead Labs could lose 110 jobs. Compulsion could lose 90 jobs, and Ninja Theory could lose 135 jobs. All told, that’s about 435 jobs that could be lost.
But that’s not all. Other divisions such as Blizzard, Bethesda and others are expected to be hit with percentage layoffs. This is likely “the biggest single cut series for Xbox,” said one source familiar with the matter but not authorized to speak.
The CWA officials mentioned the threat of AI, which is looming in the background as the reason for many layoffs both at game companies and the larger tech workforce. Many companies investing in AI say that it can make workers more efficient, but workers fear that short-term-oriented executives will choose to lay off workers as a result of that efficiency.
In a statement, a Microsoft spokesperson said, “We respect the right of our team members to make their voices heard. We have a long track record of good faith partnership with labor organizations, as demonstrated by the several finalized bargaining agreements our teams have reached with the CWA and our labor principles. We are continuing to negotiate in good faith with the CWA to reach agreements across Xbox.”
The urgency behind the press event
Back in 2022, Microsoft agreed to take a “neutrality” framework that allowed workers to make a choice freely without fear of retaliation or coercion. Now union-represented labor has contributed to game franchises like The Elder Scrolls, Diablo, Call of Duty and Overwatch.
The Xbox workers have fought to enshrine lasting protections for the workplace and have pursued wage increases and guardrails against the usage of AI in the workplace and more. After years of bargaining, union contracts are in place for some workers at ZeniMax, Blizzard QA, and Raven Software.
“We’re here today to tell you that the line is being crossed at Xbox and Microsoft,” Arce said.
He noted that Microsoft had just boosted Xbox prices as much as $150 per game console, the third price increase since 2025.
“The money is there. Leadership is simply choosing where it goes and who pays. Every company faces real business challenges and pressures. That is a fact. But let me tell you this: it’s our CWA members who make the gains that make Xbox valuable,” Arce said.
He said that union members and all Xbox employees deserve to have fair severance, a voice in vendor contract decisions and the right to internal placement so that qualified employees can move into open roles. He noted that workers at World of Warcraft marketing saw real movement from management on layoff protections over the weekend and he appreciated that management at Blizzard Entertainment was taking concerns seriously.
Arce said, “It’s proof these demands are achievable, and there’s no excuse for Microsoft not to extend the same to every worker across Xbox. That’s the difference the union makes.”
He said he was concerned just a handful of executives would make big decisions about using AI to save costs while degrading game quality and eliminating jobs.
“This is a fight over the future of the labor movement in the face of AI threats to jobs across tech and more. Digital media is being destroyed right in front of our eyes, and corporate executives making unilateral decisions without the people who actually build the product,” Arce said.
Voices from Xbox union members
Morgan Goin, a senior encounter designer at ZeniMax Online, spoke during the call and noted she has worked in games for 11 years. She had been laid off in the past at Hangar 13 and at Arkane Austin. In the latter job, Microsoft closed the studio in May 2024 with no warning, even though the company had followed various directives from the management. She was able to transfer to ZeniMax Online, but the move did cost her a month’s gap in employment at a loss of some tenure. ZeniMax workers approved a union in December 2024.
“There’s a clear gap between what we need, how Microsoft talks about us publicly, and how we’re being treated across all of their studios,” Goin said.
Microsoft has been bargaining about four hours a month, in contrast to 12 hours a month earlier.
As a union rep, Goin said she is frustrated. “I have been entrusted with the responsibility to advocate for my coworkers. I cannot do my job when Microsoft refuses to do theirs. This isn’t just affecting one studio or one department, it’s affecting all of us. We refuse to be left in the dark as the company decides to restructure in a way that seriously affects us all,” Goin said.
She added, “We’re being treated as expendable, valued one week and cut the next. Why would a game developer bother to put forward their best work under these conditions? Hard work and great games do not save you from layoffs under Microsoft. That’s why we’re coming together across Xbox to make our voices heard and to demand real accountability. Even as the company calls us too costly to keep. It is raising console prices on players again, citing a RAM shortage that Microsoft itself has exacerbated.”
And she said, “Layoff rumors are swirling, players are paying more, and executives are calling it a ‘reset.’ My coworkers and I don’t just represent workers who already have a union. We also stand with video game workers who are ready to take a stand and organize their workplaces next. Every video game worker should have a seat at the table when layoffs happen.”
She noted the average career in video game development is around five years before burnout and layoffs force a worker out of the industry.
CWA member Allison Veneto, a senior editor for franchise development at Blizzard in California, also spoke out. She said she came from a union family and got a union scholarship. She has worked on cinematics for more than a dozen video games to date. She’s on the bargaining committee for her story and franchise unit.
She noted that hundreds of workers toil on every game, and, “Those workers have more than earned the right to be respected when it comes to their job security, but since the acquisition by Microsoft, Blizzard has endured multiple rounds of layoffs.”
She noted she was moved into an open office of a laid-off employee, and she recently discovered a small bracelet with a child’s name on it, his daughter’s, that was left behind when they packed up 10 years of his belongings.
“Every time these layoffs happen, we lose incredible talent in years of institutional knowledge. The people who remain take on more work while they’re wondering if they’ll be next. My coworkers just want to focus on making amazing games for players,” Veneto said. “They do not want to spend every day worrying about whether another round of layoffs is coming. It drains away the energy we should be using to be creative.”
Veneto said the union is asking for advanced notice of planned layoffs, strong severance for subcontractors to be released before employees when possible, a voluntary severance program to reduce involuntary layoffs, two years of recall rights if they reopen your job position, and transferring workers into open roles and instituting a hiring freeze to give affected employees the first opportunity to fill positions.
Veneto added, “We want layoffs to be treated not as a quick fix to a quarterly balance sheet, but only as an absolute last resort. But if they are truly unavoidable, we are asking Microsoft for common sense protections around layoffs and a real effort to lessen the burden on affected employees, not only for the workers at the bargaining table, but for everyone who will be affected by Xbox layoffs.”
She agreed with Arce that no worker should have to fight for these protections and that Microsoft accept these terms i union contracts, but also implement them across all the Xbox studios, so every game developer can be confident that the company will exhaust all alternatives and follow clear defined rules if layoffs come for them.
Mahreen Fatima, a senior environment artist at Blizzard, said she has worked in games for seven years. Before Blizzard, she worked at Halo Studios on Halo Infinite, with a focus on world building and level art for environments. She joined the union in October 2024 after seeing so many layoffs across the industry and among colleagues.
She felt like every day is waiting for the next piece of bad news to come out. She noted that Sharma took the position in her memo that it is better to phase out contractors and bring more work in house. Fatima believes that Microsoft should consider its options related to contractors before laying off employees.
“In this climate of layoffs, it feels like there’s really no difference between being contract and being full time, we’re all just as equally dispensable in the eyes of the company,” Fatima said. “Leadership points to revenue margins to justify fighting us. And then this week they raised console prices on players for the third time since 2025. They are not short on money. Look at the billions that they’re using to invest in AI. They’re just choosing not to protect us.”
Andrew Snell of Activision Publishing, has been working as a QA tester over six years on various Call of Duty games. Microsoft tried to head of the union by making contractors full time in July 2022. But Snell helped his division form a union anyway. After Microsoft completed the Activision Blizzard acquisition, the division received a full return-to-office order.
“That was a devastating blow for us. We lost a lot of really good people out of that return to office order, and it was just weeks later that we got another announcement about layoffs,” he said.
“We are fighting back, and we won’t stop until we have just contracts and a just approach to layoffs,” he said.
United Video Game Workers treasurer Sherveen Uduwana of CWA Local 9433 pointed out that Microsoft CEO Satya Nadella made $96 million last year.
“I want to make sure we understand one thing. The actual people making games are inseparable from why video games are beloved around the world,” Uduwana said. “That’s not up for debate. Their value is not up for debate. We create things that matter deeply to people, entertainment, art, culture, whether people know it or not. Everything that makes people fall in love with games comes from the labor of thousands of game workers. It’s that hard work that not only has doubled the revenue of Xbox in less than 10 years.”
Uduwana added, “It’s not only why more people went to see the Minecraft movie than Superman last year, but it also comes from someone going in and updating the Minecraft splash screen to say Techno Blade never dies, right? It’s people dressing up as Master Chief. It’s telling new stories. It’s why games like Pentiment and South at Midnight win awards for their storytelling, something that Xbox leadership was bragging about just a few months ago, in April.”
And he said, “There is no shortage of wealth in the games industry, especially if we’re talking about Xbox, Sony, EA. These are the wealthiest game studios across North America. The executives who run these studios that have continued to lay off their workers year after year, these executives are not having difficulty making ends meet.”
And he said, “We are not asking for multi-million dollar salaries. The workers are asking for protections that allow game teams to focus on whatever it wants us to be doing, making great games. We’re asking for an end to layoffs and an end to studio closures to keep teams together, so we can retain institutional knowledge, and so we’re not recruiting new talent, having them fly across the country only to lose their job a week later. We’re asking Xbox to treat layoffs as the failure of leadership they are, and to invest in the actual future of gaming, the workers, instead of unpopular technologies like AI that players don’t want, that workers don’t want, that get labeled as slop.”