Xbox CEO Asha Sharma confirmed the anticipated setback, announcing today that 1,600 positions—about eight percent of the Xbox workforce—will be eliminated. An additional 1,600 cuts are slated for completion by the close of the 2027 fiscal year, bringing the total to 3,200 jobs, or 20 percent of the entire Xbox team.
This figure represents only a portion of the 6,400 positions Microsoft plans to cut across its divisions this year, signaling sweeping restructuring and closures that will reshape the tech giant’s landscape in the months ahead.
While many employees will retain their roles, they will do so under the looming shadow of further reductions.
Sharma acknowledged that a year‑long restructuring imposes additional hurdles, noting that “it is not possible to make all the necessary changes in a single day, and I wanted to be direct about the scale.”
Sharma’s extensive briefing outlined a sweeping overhaul aimed at turning Xbox into a more profitable venture. The plan spans major players—from Activision and Bethesda/ZeniMax to Blizzard, King, Mojang, and Xbox Game Studios—yet she emphasized that no first‑party titles will be shelved. Notably, both Mojang, the creators of Minecraft, and King, behind Candy Crush, will now report directly to Sharma.
In a candid admission, Sharma declared that the Xbox business is “not healthy,” citing operating margins that lag 3‑10 times behind comparable platform and publishing peers. She explained that growth has relied on Game Pass, multi‑platform releases, and a broader content portfolio, but those bets have yet to pay off.
She acknowledged the painful nature of these changes, stressing that they will directly affect the creative talent that has built Xbox—whether acquired, hired, or drawn by a passion for the industry. The moves do not reflect their skill or dedication.
While several studios remain operational, the reality that about 1,600 employees now face an uncertain job market tempers any perceived silver lining.
Sharma confidently declared that Xbox aims to become one of the few companies capable of entertaining more than a billion people each day, while giving everyone the chance to create and connect. He cited the platform’s beloved franchises, its worldwide network of talented studios, and announced a planned return to growth in 2027.
❓ Frequently Asked Questions (FAQ)
How many Xbox jobs are being cut in total and what percentage of the workforce does that represent?
A total of 3,200 positions will be eliminated, which equates to roughly 20 percent of the entire Xbox team.
Which first‑party studios are affected by the restructuring and will they be shut down?
The restructuring covers major players such as Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios, but no first‑party titles will be shelved; these studios will continue to operate under the new structure.
What is the broader significance of these layoffs for the gaming industry?
The layoffs signal a shift toward leaner, more agile development models, likely accelerating consolidation and reshaping competitive dynamics across the console market as companies streamline operations to improve profitability.
News Source: Destructoid
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