Xbox Chief Phil Spencer Staying Amid Layoff Rumors: Microsoft

Microsoft has firmly denied speculation about Xbox chief Phil Spencer stepping down following yesterday's sweeping job cuts across the company. Despite rumors circulating about Spencer's potential departure in the wake of Microsoft's latest restructuring, the tech giant maintains its gaming leader isn't going anywhere in the immediate future.

The recent layoffs saw approximately 9,000 positions eliminated (about 4% of Microsoft's workforce), with Xbox studios absorbing significant blows. High-profile casualties included the cancellation of Rare's Everwild and the Perfect Dark reboot, along with the shuttering of The Initiative. Candy Crush creator King and Bethesda's European operations also faced deep cuts, while ZeniMax Online Studios axed an unannounced MMO project and saw longtime studio head Matt Firor depart. Additional reports indicate staff reductions at Forza developer Turn 10 and multiple Call of Duty studios.

Amid the turmoil, industry insider @TheGhostOfHope suggested Spencer - who's faced criticism over persistent layoffs since Microsoft's $69 billion Activision Blizzard acquisition - would retire after the launch of next-gen Xbox hardware, with current Xbox president Sarah Bond reportedly poised to succeed him.

Microsoft quickly moved to quash these rumors. Xbox communications lead Kari Perez told The Verge: "Phil is not retiring anytime soon." However, the carefully worded statement leaves room for interpretation regarding Spencer's long-term future, avoiding specific timelines while reinforcing his continued leadership for the foreseeable period.

The gaming division has endured relentless cuts under Spencer's watch following the Activision Blizzard deal's completion. Microsoft eliminated 1,900 jobs in January 2024, followed by studio closures (Arkane Austin and Tango Gameworks) months later. Further reductions came in September 2024 (650 positions) and May 2025 (a staggering 6,000 roles, representing 3% of total workforce).

During a June 2024 interview with IGN, Spencer acknowledged the challenging nature of these decisions: "Running a sustainable business requires making tough calls - choices I don't enjoy but must make for the company's growth."

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Looking ahead, Microsoft has confirmed all titles featured in its June 2025 showcase remain in development, with their respective studios currently unaffected. The company plans a major presence at gamescom this August, where it's expected to showcase upcoming projects and potentially provide updates on its gaming roadmap.