Microsoft is reportedly planning to cut jobs in its Xbox division. Citing sources familiar with the company’s plans, The Verge reports that the company may lay off hundreds of employees later today. First reported by The Information, the layoffs will be the company’s second major staff reduction this year. Microsoft Xbox is also planning to consolidate many of its game studios, the report said. Earlier this year in July, Xbox CEO Asha Sharma told staff she would eliminate 1,600 roles by the end of the year on top of 1,600 roles the company cut that month. At that time, Xbox also sold four of its game studio subsidiaries.The layoffs and restructuring come as Sharma tries to improve profits at the gaming business, which has been behind some of its rivals. She has also asked Xbox to focus more on developing major game franchises such as Elder Scrolls and Fallout, while reducing its focus on smaller studios it bought in recent years.Asha Sharma took charge as Xbox CEO earlier this year. Soon after taking over, she moved quickly to change Xbox’s business. Microsoft CEO Satya Nadella and CFO Amy Hood had earlier discussed restructuring Xbox or even separating it from Microsoft, The Information previously reported. However, they have more recently backed Sharma’s plans to restructure the gaming business.
Asha Sharma lays out four-point plan after 2,800 job cuts
In a memo sent on July 30, Xbox CEO Asha Sharma said the business will return to player and revenue growth by the end of fiscal year 2027, which wraps next June. Profits, she added, need to climb back in line with industry averages. Every function and every studio owns a slice of that outcome.Sharma then laid out four priorities for FY27, each starting with the letter C: strengthen the platform led by console, grow games into global franchises, turn Minecraft into a creator platform, and extend the worlds fans already love.
