It’s today been revealed that Microsoft has made 4% of its total workload (or roughly 9,100 employees) redundant and as part of this news, significant cuts have been made at several Xbox teams including Rare and The Initiative which has resulted in cancellations for some of its most anticipated games.
The Initiative is being totally closed down which means that work on Perfect Dark is being stopped and therefore it is cancelled. Similarly, significant cuts have been made at Rare with Everwild cancelled as well as head talent such as Gregg Mayles (35+ years at Rare) has been laid off by Xbox.
It’s said that several unannounced titles are also being wound down including the next MMORPG from Zenimax Online.
In a statement by Matt Booty provided to employees, he said:
“We have made the decision to stop development of Perfect Dark and Everwild as well as wind down several unannounced projects across our portfolio. As part of this, we are closing one of our studios, The Initiative. These decisions, along with other changes across our teams, reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape. We did not make these choices lightly, as each project and team represent years of effort, imagination, and commitment.
“Our overall portfolio strategy is unchanged: build games that excite our players, continue to grow our biggest franchises, and create new stories, worlds, and characters. We have more than 40 projects in active development, continued momentum on titles shipping this fall, and a strong slate headed into 2026.
“For those directly affected, we are working closely with HR and studio leadership to provide support, including severance, career transition assistance, and where possible, opportunities to explore roles on other teams.
To everyone across our studios: thank you. Your creativity and resilience continue to define who we are. I believe in the strength of our teams and the direction we’re taking on the path ahead.” — Matt Booty, Xbox Game Studios”
It does appear as though this story is still developing, so we’ll keep you posted if any other major news appeared.
