Xbox developers have formed a coalition to request enhanced layoff protections for employees amid rumors of possible staff reductions at Microsoft's gaming division this summer.

The United Video Game Workers, together with the Communications Workers of America, held a press conference with representatives from Microsoft’s first‑party studios, including Zenimax (the parent of Bethesda) and Activision Blizzard. The group called for advance notice of layoffs, temporary hiring freezes to allow internal transfers, and two‑year recall rights for affected workers.

Union officials said Microsoft has been slow to address layoff protections in current negotiations. Developers from Zenimax and Activision reported that the company has not responded to their proposals, while Blizzard’s World of Warcraft team said it has seen positive movement on the issue. Compulsion Games has already experienced layoffs, and other studios such as Double Fine and Ninja Theory are negotiating with Microsoft to avoid broader cuts. Craig Duncan, who led Xbox Game Studios for 15 years, departed from Microsoft. CEO Satya Nadella has expressed a desire for Xbox to improve its financial performance, and reports indicate speculation that the division might be spun out as an independent company. Additional price increases for Xbox consoles are expected in 2027.

The timeline for any layoff decisions or restructuring of the Xbox division has not been disclosed.