Xbox Reportedly Planning Massive Layoffs to “Reset” Business

After the recent buzz of the Xbox Games Showcase, Bloomberg has revealed that Microsoft’s Xbox division is poised for a significant round of layoffs next month.

This wave of job cuts is slated to commence after Microsoft’s fiscal year ends in June, marking a full year since the company’s earlier, large‑scale redundancies that saw the closure of its AAA studio, The Initiative, the cancellation of the Perfect Dark reboot, and the shelving of Rare’s long‑running Everwild project.

While the exact number of positions to be eliminated remains undisclosed, an internal email—now publicly shared by Xbox Wire—shows that Asha Sharma and Matt Booty are steering a “reset” of the Xbox business, a move prompted by the division’s multi‑billion‑dollar revenue losses despite hefty reinvestments.

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Microsoft has disclosed that it has invested more than $20 billion—excluding its Activision‑Blizzard‑King portfolio—in continuous development of its content, platform, and hardware subsidies. Despite this hefty outlay, the company’s annual revenue fell by almost half a billion dollars during the same period.

The letter further hints at sweeping changes in how Xbox will finance its production pipeline and upgrade its platform infrastructure, which the company claims is no longer “built for the road ahead.”

While it remains uncertain whether these adjustments will lead to additional studio closures or game cancellations, stakeholders can expect to gain clearer insights in the coming weeks as the situation develops.