Two weeks ago, it was reported that multiple studios were in danger of being closed as part of another big wave of layoffs at XBOX with Ninja Theory, Compulsion Games, and Double-Fine all part of the list. Today, a new report reveals that Arkane and Undead Labs are also in danger of being closed.

Xbox is weighing up canceling its Marvel’s Blade game and shuttering Arkane. Microsoft could shut at least five studios as part of big Xbox layoffs starting next week. Details 👇 https://t.co/nAzgWfltcm

— Tom Warren (@tomwarren) June 30, 2026

Sources familiar with Microsoft’s plans have told The Verge that the layoffs will lead to studio closures or spinoffs, potential mergers of studios, and canceled games, including Arkane’s Marvel’s Blade, and Undead Lab’s State of Decay 3. The cancelation of Blade would be part of a wave of cost cuts and job losses that are planned for Microsoft’s gaming division.

Similar to Ninja Theory, Double Fine, and Compulsion Games, XBOX is exploring options to sell Arkane and is actively looking for a buyer for Undead Labs. If buyers are found, than these studios will avoid being closed. However, sources stress that these talks could take months in some cases.

jfc, I just got word of a list of Xbox studio closures (no, not posting them). If it’s even close to true (and it’s from inside) this will likely be the largest single layoff event in gaming history.

Xbox is going to be supremely unpopular for a very long time and the… https://t.co/F13yU1Vj2K

— George Broussard (@georgebsocial) June 30, 2026

There’s also rumors that this round of layoffs at Microsoft will be the largest layoff event in gaming history. Insiders are saying that Microsoft is finalizing its layoff decisions by June 30, with cuts set to begin on July 6.

Xbox layoffs are imminent?

According to insiders, Microsoft is finalizing its major Xbox layoff decisions by Tuesday (6/30), with cuts set to begin Monday (7/6).

The July timing is not a coincidence. Microsoft’s fiscal year closes June 30, making early July a standard window…

— George Broussard (@georgebsocial) June 29, 2026