Xbox Layoffs Hit Age of Empires Studio, Report Says

Microsoft's latest round of Xbox layoffs has hit the developer behind Age of Empires hard enough to cancel its next project, according to a PC Gamer report.

The report does not specify exact headcount figures for the studio affected, but describes the cuts as devastating for the Age of Empires team and confirms that the franchise's next game — which had not been publicly announced — is now off the table.

The layoffs form part of a broader restructuring at Microsoft's gaming division. The company has carried out repeated workforce reductions across Xbox since early 2024, and this latest round extends that pattern to one of its long-running strategy franchises. Age of Empires, first released in 1997, remains one of Microsoft's oldest continuously managed PC properties.

For developers in the games industry, the news lands in a labor market that has already shed tens of thousands of jobs since 2023, with studios of every size — from independent teams to the largest publishers — cutting staff. Canceled projects like this one typically displace not only current employees but also contractors, QA staff and external partners who had been lined up for the production pipeline.

At the individual level, the practical reading is straightforward: even studios attached to flagship franchises and deep-pocketed owners are not insulated from cuts. Developers who built their market position around a single live franchise face the sharpest risk, because a project cancellation can eliminate an entire workstream at once rather than trimming it. Workers with portable skills — engine experience, live-ops, cross-platform tooling — retain more options when a title dies.

The report cites no formal statement from Microsoft on the future of the Age of Empires franchise itself, and it remains unclear whether the affected studio will be reassigned to other projects or face further reductions. Whether Microsoft offers redeployment, severance terms or rehiring into other Xbox teams will determine how much of this talent stays within the company — and how much flows into an already crowded job market for game developers.