Microsoft is preparing for a new wave of massive cuts in the Xbox division. According to Bloomberg journalist Jason Schreier, before mass layoffs, the company actively terminates contracts with external contractors and partners. The first hit was PR-agency Assembly, which dealt with communication with the press, organization of previews and reviews of games. The layoffs in the agency itself began immediately.

The decision to terminate the contract with the main PR contractor is particularly revealing. By cutting its channels of communication with journalists in the face of a wave of layoffs, Xbox makes it clear that unpleasant news is coming and that the company does not plan to comment on it. These measures are being taken against a backdrop of the industry’s difficult economic context: record-high prices for RAM and video cards, inflated to nine-figure sums in AAA budgets, and Microsoft’s massive investments in AI infrastructure.

The situation at the Xbox is also closely linked to recent staff reshuffles at the very top. Microsoft CEO Satya Dojla removed Xbox CEO Phil Spencer from his post, replacing him with Asha Sharma. This appointment is seen as an attempt by the new leadership to put in order a farm that has long operated on the principle of endless demands for funding without clear returns.