Microsoft’s gaming division is bracing for another round of significant layoffs as part of a company-wide restructuring. According to Bloomberg, these layoffs will be formally announced next week. Engadget has reached out to Microsoft for a comment on the matter.

Earlier this year, Microsoft confirmed plans to lay off approximately three percent of its global workforce, affecting all levels and regions. This move, aimed at streamlining operations and flattening the management structure, would result in about 7,000 job losses. As reported by Bloomberg, Xbox management is expecting “substantial cuts” across the entire team.

This is not the first time Microsoft’s gaming division has faced significant cuts. In January 2024, the company cut 1,900 jobs, and in September of the same year, another 650 positions were eliminated. Furthermore, Microsoft closed down studios such as Arkane Austin and Alpha Dog Games, merging Roundhouse Studios into ZeniMax Online Studios, and also shut down Tango Gameworks. However, Krafton, the publisher of PUBG: Battlegrounds, acquired the latter studio in August.

Financially, for the first quarter of the calendar year, Microsoft reported a net revenue of $25.8 billion. Additionally, the company noted an eight percent year-over-year increase in Xbox content and services revenue.