Xbox Division Plans Major Layoffs as New CEO Outlines Business 'Reset'
Microsoft's Xbox division is preparing significant layoffs to begin in July following a memo from new CEO Asha Sharma outlining financial and operational challenges. The restructuring marks the first major overhaul under Sharma, who took over in February and cited a 3% accountability margin and declining revenue despite $20 billion in investments. The cuts reflect Xbox's struggle with subscription strategy, hardware costs, and competition for player attention in a crowded gaming market.
Microsoft's Xbox division is planning major layoffs expected to begin after the company's fiscal year ends on June 30, according to reports from Bloomberg and other sources. New CEO Asha Sharma and chief content officer Matt Booty sent a memo to staff outlining several business challenges, including a 3% accountability margin, hardware component costs that have increased fivefold in two years, and declining annual revenue despite over $20 billion in content and platform investments over the past five years. The memo, published on Xbox Wire, frames the layoffs as part of a broader "reset" to address structural weaknesses, though it does not explicitly mention job cuts. Sources suggest the restructuring could involve studio closures and potentially around 1,000 positions, though the exact scale remains unclear. The layoffs represent the first major action by Sharma since becoming CEO in February and follow strategic shifts including Game Pass price increases and the removal of day-one "Call of Duty" releases from the subscription service.
How coverage differed
The Verge emphasizes the layoff announcement more prominently in its headline and leads with Bloomberg's reporting of "significant" cuts, while Variety and Channel NewsAsia frame the story around Sharma's memo and the business challenges outlined within it. The Verge also mentions unconfirmed rumors of 1,000 layoffs and potential studio closures, whereas the other sources are more cautious about specific numbers.
What different sources said
- VarietyCenter
Layoffs Coming at Xbox? New CEO Outlines Upcoming ‘Reset’ in Memo to Staff: ‘Surprising and Even Frustrating’ Realities Facing Business
- The VergeLeft
Xbox warns of a ‘reset’ as it prepares for layoffs
- Channel NewsAsiaCenter
Microsoft's Xbox plans for major layoffs next month, Bloomberg News reports
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