Microsoft moved swiftly to dispel retirement rumors surrounding Xbox chief Phil Spencer on Wednesday, as the tech giant announced sweeping layoffs affecting approximately 9,000 employees across its gaming division and broader operations. The denial comes at a turbulent moment for Xbox, which despite record player engagement faces its latest round of job cuts and studio closures.
Microsoft's Chief Communications Officer Frank Shaw directly challenged speculation on social media platform X, responding to reports aggregating the retirement claim by stating "so long as by 'summed it up' you mean 'made it up'". The company reinforced its position in a statement to The Verge, with Xbox communications head Kari Perez confirming "Phil is not retiring anytime soon".
The retirement rumors originated from a Call of Duty leaker account called TheGhostOfHope, which claimed Spencer was preparing to step down with Xbox president Sarah Bond positioned as his successor during the transition to next-generation hardware expected between 2026 and 20281. Microsoft labeled these claims as "completely made up"1.
Shaw later clarified to Insider Gaming: "It's not true that Phil is planning to retire"2. The forceful pushback suggests Microsoft views the speculation as potentially damaging during an already challenging period for its gaming operations.
The retirement rumors emerged amid Microsoft's announcement of cutting 4% of its global workforce, impacting about 9,000 positions across the company's 200,000-person staff1. Xbox bore a portion of these cuts, with multiple studios facing layoffs, game cancellations, and complete closures, including Rare's Everwild project and The Initiative studio12.
Spencer addressed staff in an internal memo obtained by Insider Gaming, acknowledging the timing of cuts during Xbox's period of growth. "I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger," Spencer wrote3.
He explained the layoffs as necessary to "position Gaming for enduring success" and allow focus on "strategic growth areas"3. The memo emphasized that decisions reflected business priorities rather than employee performance.
Spencer has led Xbox for over a decade through major strategic pivots, including Xbox's expansion to multiple platforms and increased emphasis on PC gaming1. These shifts, combined with repeated layoff cycles, have fueled speculation about leadership changes as Xbox retreats from traditional console-focused strategies.
The company's current success, Spencer noted in his memo, stems from "tough decisions we've made previously," suggesting more strategic adjustments may follow2. "We must make choices now for continued success in future years," he told staff2.
