Assembly, the PR agency that handles a big chunk of Xbox’s external communications, has laid off staff as part of an agency-wide reorganization. Some employees working on the Xbox account were among those affected, though the agency is reportedly still attached to Xbox.
The news landed the same day Bloomberg’s Jason Schreier reported that Microsoft is already cutting contracts and vendors tied to Xbox, with larger Microsoft Gaming layoffs expected to follow once the company’s fiscal year ends on June 30.
Microsoft’s fiscal year runs July 1–June 30. Layoffs announced after July 1 fall into the new fiscal year, which lets the company keep restructuring charges, severance costs, and benefit payouts out of the books it’s about to close. Schreier’s reporting suggests the timing of the bigger Xbox cuts is tied directly to this calendar.
The contract and vendor reductions, meanwhile, are reportedly already happening. External services like PR firms, QA, localization, trailer houses, and freelance support are usually the first to feel a squeeze before full-time staff cuts begin. Agencies like Assembly typically handle press releases, review code distribution, interview scheduling, and event logistics rather than internal product or strategy decisions.
Microsoft Gaming has already been through several brutal rounds. In January 2024, around 1,900 employees were cut across Xbox, Activision Blizzard, and ZeniMax. In May 2024, Microsoft shut down Arkane Austin, Tango Gameworks, and Alpha Dog Games, and absorbed Roundhouse into ZeniMax Online.
