Xbox Announces Major Restructuring, Signals Further Layoffs

Xbox has announced a comprehensive “reset” strategy aimed at both its internal teams and the wider gaming community, coinciding with reports that the company will soon initiate another round of workforce reductions.

In a message to employees—now publicly available on the Xbox Wire blog—lead executives Asha Sharma and Matt Booty highlighted early outcomes from the Xbox Games Showcase and FanFest. They emphasized that rapid execution, close engagement with fans, and a unified vision are key to unlocking new possibilities. “We have made mistakes, and will continue to make them, but what matters is that we listen, learn, and adjust the course where needed. Remember, our fans are rooting for us,” the leaders wrote.

The memo outlines five core pillars for the reset: tackling competitive pressures, managing production costs, navigating hardware component shortages and pricing, bolstering first‑party game development, and strengthening platform infrastructure.

While the internal memo stops short of mentioning staff cuts, Bloomberg journalist Jason Schreier has reported that Xbox is “planning major layoffs next month,” according to sources familiar with the matter.

The report further reveals that Xbox intends to slash its marketing budget in tandem with the announced layoffs.