Xbox Chief Phil Spencer Not Retiring Soon, Microsoft Says Amid Layoff Speculation

Microsoft has firmly stated that Xbox leader Phil Spencer has no plans to retire in the near future, addressing speculation about his role following recent widespread layoffs.

Approximately 4%, or just over 9,000 employees, were let go across Microsoft, with the majority of cuts occurring outside its gaming division, though Xbox studios faced significant impacts. Projects like Rare’s Everwild and the Perfect Dark reboot were scrapped, and The Initiative was shut down.

Elsewhere, King, the maker of Candy Crush, saw substantial layoffs, as did Bethesda’s European operations. An unannounced MMO from ZeniMax Online Studios, developers of The Elder Scrolls Online, was canceled, with its team reduced. Matt Firor, the long-time head of ZOS, also stepped down. Reports suggest Turn 10, the Forza developer, and several Call of Duty studios were affected by layoffs as well.

Amid the turmoil, Call of Duty leaker @TheGhostOfHope claimed Spencer, who has faced criticism for layoffs following Microsoft’s $69 billion acquisition of Activision Blizzard, was poised to retire after the next Xbox console launch, with Xbox president Sarah Bond slated to succeed him.

Microsoft countered these claims in a statement to The Verge, with Kari Perez, head of Xbox communications, asserting: “Phil is not retiring anytime soon.”

Notably, Microsoft’s response is somewhat ambiguous, as “anytime soon” lacks a clear timeframe. Does “soon” refer to this year, next year, or perhaps 2027?

Microsoft is reportedly planning to launch its next-generation Xbox in 2027, though these plans could shift. What is clear is that Spencer has overseen multiple rounds of significant layoffs since driving the Activision Blizzard acquisition. In January 2024, Microsoft cut 1,900 jobs, followed by additional reductions when it shuttered Arkane Austin, developer of Redfall, and Tango Gameworks, creator of Hi-Fi Rush. In September 2024, another 650 gaming division jobs were eliminated. In May this year, Microsoft laid off 6,000 employees, representing 3% of its total workforce.

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In a June 2024 interview with IGN, Xbox chief Phil Spencer stated: "I must manage a sustainable business within the company and drive growth, which sometimes requires tough decisions that, frankly, I don’t enjoy making, but someone has to make them."

What’s next for Microsoft? For now, all games featured in the June 2025 gaming showcase and their respective studios are reportedly secure. The company has also confirmed a major presence at gamescom in August, where it plans to showcase its upcoming game lineup.