Xbox reportedly planning more layoffs as “CEO calls for “Xbox reset”
Xbox is planning major layoffs in July following a strategic “reset” announced by new CEO Asha Sharma, expected shortly after Microsoft’s fiscal year closes on June 30. The overhaul aims to address declining revenue and acknowledged operational inefficiencies within the division.
In an internal memo, Sharma revealed that Xbox’s profit margin has fallen to 3%, with revenue declining nearly half a billion dollars over the past five years despite significant investment. She attributed this to the company becoming “over-extended” and “too reliant on vendors,” following expansion into subscription services, streaming, and multiple devices that no longer align with business priorities.
Xbox is also implementing significant budget cuts to marketing and other areas. While the exact number of layoffs remains unclear, reports suggest potential workforce reductions could number in the thousands, with possible studio closures under consideration. This marks the fourth consecutive year of layoffs for the division.
Going forward, Xbox intends to refocus on strengthening major franchises and reassessing investment priorities over the next five years. CEO Sharma signaled a potential return to console exclusives, marking a strategic shift, while the company continues planning next-generation hardware through Project Helix, which reportedly targets a 2027 holiday release despite industry-wide component pricing challenges.
Sources
- Xbox reportedly planning more layoffs as “CEO calls for “Xbox reset”
- Xbox Reportedly Planning Big Layoffs For Next Month
- Xbox’s Project Helix Seems to Be Targeting a Holiday 2027 Release, According to New Memo from CEO Asha Sharma
- Xbox Reportedly Planning ‘Significant’ Layoffs, Budget Cuts for Marketing, and More
- Xbox To Hold Major Layoffs In July
- Xbox Planning Major Layoffs Next Month, Could Involve a Studio Closure
- Xbox warns of a ‘reset’ as it prepares for layoffs
- Xbox is reportedly planning major layoffs, as Sharma tells staff: ‘We need to reassess our priorities’
- Xbox admits it’s “over‑extended” as leadership signals a major rethink of its studio strategy
- “Xbox division is planning major layoffs next month”: Xbox’s turnaround may come with a heavy cost