Two titles have been shelved, including Microsoft Flight, but Microsoft has not closed its Vancouver studio.
Contrary to earlier reports, the platform holder told Gamespot that it has not shuttered the whole studio.
"Microsoft Studios has decided to end development on Microsoft Flight and Project Columbia. As a result of this action, some positions within the development teams have been eliminated. Microsoft human resources is working with the affected individuals to find new roles within the company," a statement advised.
"Microsoft Studios is invested in British Columbia and still has several teams, both in Vancouver and Victoria, which will continue to produce the best entertainment and gaming experiences possible."
Project Columbia is an unannounced Kinect shooter, now likely never to see the light of day.
Microsoft said only a "small" number of staff had been affected by the cuts; earlier today it was believed that an entire team of 35 had been laid off after an anonymous tipster contacted Kotaku.