Xbox has started significant layoffs at Compulsion Games, with at least a dozen employees publicly announcing their departure and actively seeking new work as of mid-June 2026 [1, 2, 3]. The cuts at Compulsion are part of a larger restructuring within Xbox Game Studios following a nearly $500 million decline in revenue over five years despite $20 billion in investments, according to Xbox CEO Asha Sharma [4].

Reports indicate more than 90 employees at Compulsion Games could be affected, though the exact number remains unconfirmed [4]. Studio leadership reportedly allowed employees to openly search for new jobs before the layoffs began, signaling serious workforce reductions ahead [3]. Some employees expressed surprise at the timing, with layoffs expected shortly after Microsoft's fiscal year ends on June 30, 2026 [1, 3].

Several former and current Compulsion staff have publicized their availability on LinkedIn, such as Mike Sklavounos stating, "In an unexpected turn of events, I've officially turned on the 'open to work' banner," and Thomas de Rego saying, "After five unforgettable years at Compulsion, the time has come to look for a new adventure" [1].

Beyond Compulsion Games, other Xbox studios like Ninja Theory and Double Fine face possible closure or restructuring, though official confirmation on full shutdowns is lacking [4, 5]. An anonymous internal source posted on the Blind platform claimed that multiple studios—including Compulsion, Ninja Theory, the Flight Simulator team, Worlds Edge/Age of Empires, and Double Fine—will close next week, resulting in over 1,000 layoffs across Xbox Game Studios [5]. However, this claim has low confidence and remains unverified. Notably, Asobo Studio is the main developer for Microsoft Flight Simulator and is an external partner, so internal Xbox layoffs likely affect support or publishing teams rather than Asobo itself [5].

The future of Compulsion Games after these layoffs is uncertain, with no clear details on whether the studio will continue operating or fully close [4, 2]. The layoffs at Xbox game studios are expected to finalize soon after June 30, 2026, aligning with the end of Microsoft's fiscal year [3].