As reports that major layoffs are coming to multiple Microsoft-owned game studios continue to swirl, numerous developers at South of Midnight studio Compulsion Games have indicated that they are leaving the studio and looking for new work.
Posting “open to work” messages on LinkedIn is a very common way for game industry employees to search for new opportunities—and, sadly, it’s also often a first sign of layoffs at game studios.
That was initially thought to be the situation here as well, but according to Bloomberg’s Jason Schreier it’s not the case: Schreier said on Reddit that with layoffs looming, “studio leadership gave their employees permission to openly look for work because they almost certainly will be losing their jobs.”
Still, it’s clear that the move caught at least some Compulsion employees by surprise: Principal level designer Mike Sklavounos, for one, described it as “an unexpected turn of events.” According to Eurogamer, at least a dozen Compulsion employees have indicated that they are looking for new work in some capacity, a significant number for a relatively small studio of about 90 employees.
More worryingly, the sudden spike in employees looking for work is also pretty close to confirmation that another Xbox bloodbath is in fact coming. Along with Compulsion, reports earlier this month claimed that Double Fine, Ninja Theory, and “several other studios” were at risk of closure as part of an “Xbox Reset” being shepherded by CEO Asha Sharma and CCO Matt Booty; the pair said in an open letter published earlier this month that Microsoft “over extended” itself with a rash of studio acquisitions over the past few years—in other words, yet another management failure that thousands of employees will have to pay for.
The current expectation is that the layoffs will be imposed in early July, following the end of Microsoft’s fiscal year, which wraps up on June 30. Microsoft did the same thing in 2025, laying off thousands of employees and cancelling multiple videogame projects on July 2 of that year.
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