Xbox is planning significant layoffs next month, according to a new report. Bloomberg’s Jason Schreier says these cuts are part of CEO Asha Sharma’s effort to reduce financial losses within the Xbox division. The exact number of employees affected hasn’t been announced, but the layoffs are expected to happen soon after Microsoft’s fiscal year concludes on June 30th.
The report shows that in addition to job cuts, Microsoft is planning to reduce budgets for the Xbox division. Sources say this will include less spending on marketing and other parts of the business. Xbox hasn’t yet made a public statement about these changes.
In a recent post about major “realities” that XBOX is facing, Sharma and chief content officer Matt Booty had mentioned the loss of revenue faced by the division. They also brought up the fact that the fiscal year will be ending with XBOX’s revenue having gone down by 3 percent year-on-year. The duo said that, “Going forward, this cannot continue.”
We expect to finish the year with an accountability margin of around 3 percent, which is lower than last year. Without including Activision Blizzard King, we’ve invested over $20 billion in our games, platform, and hardware over the last five years. However, our yearly revenue has decreased by almost half a billion dollars during that same period, and this trend isn’t sustainable.
This report comes just a few leaks after an internal memo sent out by Sharma to XBOX staff had been spotted. In the memo, Sharma spoke about getting XBOX ready for the future with stronger foundations. However, part of these plans included “making hard choices”.
“We are building a stronger XBOX,” Sharma reportedly said in the memo. “That means making hard choices about what we build, where we invest, and what kind of company we need to be going forward. That is part of what you are starting to see in the shift from Xbox to XBOX. It reflects a decision to be deliberate in how we show up for the players who care most about this brand.”
Recently, when discussing games released only on Xbox, Sharma admitted the company isn’t currently doing very well financially. She explained that they’re testing whether exclusive games can be profitable by starting with just a couple of key titles. Once Xbox’s financial situation improves, they hope to release more exclusives in the future.
We’re one of the top two game publishers globally, and that means we want our games to be available on as many devices as possible. A wider audience makes us stronger. However, we’re also evolving into a platform, and most platforms offer exclusive content and services, which is something we’re considering as well.
“And so, this is a journey for us. Our business isn’t particularly healthy. So, we’re starting by introducing 1-2 signature exclusives. As the business gets healthy, we will look to try and do more.”
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2026-06-11 15:11