Reliable industry sources suggest Microsoft is preparing another round of substantial layoffs that may significantly impact Turn 10 Studios, the veteran developer behind the Forza Motorsport racing series. As Xbox's longest-running first-party studio (established in 2001), Turn 10 could face severe staff reductions as part of Microsoft's ongoing restructuring strategy.

This development follows Microsoft's recent announcement of eliminating thousands of sales positions in July 2025, with plans to outsource these functions. These cuts come on the heels of last month's reduction of 6,000 positions (3% of global workforce) aimed at reducing operational redundancies. While previous layoffs affected broader Microsoft operations, the focus now appears shifting to the gaming division.

Industry veteran George Broussard recently suggested on Bluesky that 1,000-2,000 Xbox positions (10-20% of the division) might be eliminated. The Verge's Tom Warren corroborated these reports, specifically noting Turn 10 Studios is preparing for significant cuts.

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Turn 10 has exclusively developed the Forza Motorsport franchise since its 2005 debut, contributing to the Forza Horizon spin-offs as well. Their latest 2023 installment continues receiving updates but has struggled with fan approval due to controversial design choices including an RPG-style progression system and absence of split-screen multiplayer. Notably, Microsoft hasn't shared Xbox Game Pass adoption numbers for the title.

This contrasts sharply with Playground Games' Forza Horizon 5, which attracted 10 million players in its first week (2021) and recently surpassed 45 million total players following its PS5 release. Microsoft executives may be comparing these metrics when evaluating Turn 10's future.