Two hundred and sixty-eight jobs cut across Xbox in a single week. Nearly half of them came from one studio. World’s Edge, the developer responsible for the Age of Empires franchise, has been gutted in the latest round of Xbox layoffs, losing close to 50 per cent of its team and its unannounced next project in a single reorganisation.
The cuts come as Microsoft reshuffles its gaming division under a broader plan to eliminate approximately 3,200 roles this fiscal year. The 268 positions axed this week sit on top of roughly 1,600 cuts earlier in 2026, and they signal a deeper structural shift: World’s Edge now operates under the Activision umbrella, alongside the studio that makes Call of Duty.
Half the Studio Gone Overnight
Former employees took to LinkedIn and Resetera to describe the scale of the reductions. The picture that emerged is stark. World’s Edge — the team that shipped Age of Empires 2: Definitive Edition, Age of Empires IV and Age of Mythology: Retold, all on PlayStation 5 as well as PC and Xbox — has been reduced to a skeleton crew. The studio had built a strong track record across multiple releases, yet it was still vulnerable to the kind of corporate restructuring that has become a recurring theme across the games industry.
Adam Isgreen, the former studio director at World’s Edge, was among those let go. In a LinkedIn post, he expressed disappointment but noted the team had real ambition before the cuts landed.
“I am of course disappointed that this is the way the time with World’s Edge and Age ends for myself and many of my talented teammates — we had some great plans for what’s next — and I hope the team that remains can rise to the occasion down the line.”
Andrew Martz, a former senior software engineer at the studio, confirmed separately that the cancellation was not a rumour. “Our studio was reorganised to be under the Activision umbrella,” he wrote. “As part of that reorg, our next project was cancelled and a large chunk of our studio was laid off. I was part of that layoff.”
What Was the Cancelled Project?
Microsoft has not disclosed what World’s Edge was building. Given the studio’s specialisation in real-time strategy, the cancelled game was almost certainly an RTS — potentially Age of Empires 5, though that has not been confirmed. What is clear is that the project died as part of the Activision transition, not because of creative or technical failure within the team itself.
Context: World’s Edge was not the only studio affected. Rare, the British developer behind Sea of Thieves, is also being moved under Activision as part of the same restructuring — a sign that the changes extend well beyond a single franchise.
The future of the Age of Empires franchise now sits in an unusual position. The existing catalogue — particularly Age of Empires 2, still one of the best strategy games ever made — continues to generate revenue and maintain a dedicated player base. But with half the team gone and the next project scrapped, the pipeline for new entries looks uncertain at best.
A Franchise in Limbo
World’s Edge was founded to steward the Age of Empires brand into a new era, coordinating between external development studios and ensuring consistency across the franchise. That role becomes considerably harder with a fraction of the original workforce and a new corporate parent whose primary expertise lies in first-person shooters rather than real-time strategy games.
Microsoft has yet to comment on what World’s Edge will work on next under Activision, or whether the studio will retain its focus on strategy games. For the employees who lost their jobs this week, and for the fans who hoped Age of Empires 5 was in development, the answer remains unclear.
What is certain is that the Xbox restructuring continues to reshape the industry’s landscape — and one of its most beloved strategy studios is now fighting to define what comes next.
