Layoffs Hit Xbox Studios Ahead of Closure

The cuts are part of larger reductions at Microsoft

Microsoft is cutting staff at Xbox Entertainment Studios on Thursday ahead of the division's planned closure, The Hollywood Reporter has learned.

A Microsoft spokesman said the layoffs are part of a company-wide reduction in staff that has affected about 2,100 jobs across several business units. The cuts are part of the Redmond, Wash., company's plan to reduce its workforce by 18,000 positions over the next year, which new CEO Satya Nadella announced in July as part of an effort to refocus Microsoft's core business.

Xbox head Phil Spencer announced at the time that XES would be shuttered as part of the company reorganization. An initial round of layoffs occured at the Santa Monica-based studio following the announcement, but studio chief Nancy Tellem and exec vp Jordan Levin have remained with the company along with some XES employees to shepherd existing projects. More layoffs are expected before the studio is officially shuttered.

"As we announced July 17, Microsoft is reducing our overall workforce by approximately 18,000 positions over the course of the year, with about 13,000 reductions initiated in July," reads Microsoft's statement. "We've taken another step in that process today, with the elimination of about 2,100 jobs which are part of the overall 18,000 number announced in July. The reductions happening today are spread across many different business units, and many different countries. We will continue to go through this process in the most thoughtful manner possible, with the deepest respect for affected individuals and recognition of their service to the company. We will offer severance to all affected employees."

Tellem and Levin have been busy in the last two months, selling drama series Humans to AMC and shopping the studio to potential buyers, including Warner Bros. Meanwhile, flagship series Halo remains in limbo as XES continues to negotiate a deal to bring the Steven Spielberg-produced project to Showtime, though a Microsoft spokesman insists that the project remains "on track."

"Led by 343 Industries, Halo: Nightfall will be released this fall as part of Halo: The Master Chief Collection, and the Halo television series remains on track," the spokesman said. "Neither project is impacted."

Sept. 18, 3:36 p.m. Updated to include statement from Microsoft regarding Halo projects.

Email: Natalie.Jarvey@THR.com

Twitter: @NatJarv