Xbox is reportedly continuing its cost-cutting efforts as Microsoft approaches the start of its new fiscal year, with new reports suggesting the company is reviewing third-party vendor contracts ahead of widely expected layoffs.
However, an early claim regarding Xbox’s long-time PR agency has since been corrected.
Microsoft Preparing for Another Round of Cuts
According to Bloomberg journalist Jason Schreier, Microsoft is reducing costs across its Xbox division as the company prepares for what could become one of the largest restructuring efforts in Xbox’s history.
With Microsoft’s new fiscal year beginning on July 1, industry reports have suggested that layoffs affecting multiple Xbox teams could be announced in the coming days.
Alongside internal staffing changes, Microsoft is also believed to be evaluating relationships with external vendors and service providers.
Initial Report About PR Agency Corrected
One of the early reports claimed that Xbox was ending its relationship with longtime public relations agency Assembly, with layoffs at the agency allegedly tied to Microsoft’s restructuring.
However, Schreier later issued a correction.
According to the updated information:
“Today’s Assembly layoffs were part of an agency-wide reorganization and were not related to Xbox ending contracts.”
While employees working on the Xbox account were reportedly affected, Assembly continues to work with Xbox, meaning the layoffs were not the result of Microsoft terminating its partnership.
Xbox Still Reviewing Vendor Contracts
Although the Assembly report was corrected, Schreier maintains that Microsoft is reducing certain third-party vendor contracts as part of its broader cost-cutting strategy.
At this stage, Microsoft has not officially confirmed:
- Which vendors are affected
- How many contracts are being reduced
- The size of the anticipated layoffs
- Which Xbox teams may be impacted
Layoff Announcement Could Arrive Soon
Industry expectations remain that Microsoft will announce workforce reductions shortly after the close of its fiscal year.
Reports over recent weeks have suggested several Xbox-owned studios have been operating under significant uncertainty, while Microsoft continues restructuring following years of major acquisitions and rising development costs.
Until an official announcement is made, many details surrounding the reported layoffs remain unconfirmed.
Microsoft Has Yet to Comment
Neither Microsoft nor Xbox has publicly addressed the latest reports regarding vendor reductions or the anticipated layoffs.
With the company’s new fiscal year now underway, further announcements are expected soon if the reported restructuring plans move forward.
