Xbox Plans to Lay Off 3200 Employees
Microsoft said the cuts are part of a broader push to raise margins as Xbox’s player base and playtime have declined.
- On Monday, Xbox CEO Asha Sharma announced the division will cut 3,200 jobs over the next year, with 1,600 reductions occurring immediately as part of broader Microsoft layoffs totaling 4,800 positions affecting around 20% of Xbox's staff.
- Sharma identified unsustainable revenue margins operating at 3-10x lower than competitors and a 'hardware crisis' as primary drivers, noting Game Pass investments failed to achieve expected growth despite record spending.
- Four studios—Ninja Theory, Undead Labs, Compulsion Games, and Double Fine Productions—are being divested, impacting 350 employees who will retain their IP and funding to continue independently as part of the 'reset.'
- Helen Chiang was promoted to Chief Operating Officer with end-to-end profit and loss responsibility across content, hardware, platform, and services, while Arkane Studios began consultations with its Works Council regarding strategic options.
- The Communications Workers of America urged the company to negotiate 'meaningful layoff protections' as reductions coincide with Microsoft's skyrocketing memory costs tied to AI compute expansion.
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If Microsoft sold off Xbox, who would even buy it?
This week, Microsoft took a huge ax to its Xbox business. The company announced that it would be laying off 1,600 workers now, 1,600 more over the next fiscal year, and that it would be shedding four studios. Xbox CEO Asha Sharma hasn't been shy about why she's making such dramatic cuts, saying in a memo that the business is "not healthy." Speaking to Fortune, she said that "we simply spread ourselves too thin." Given the scale of the changes an…
Xbox acknowledged that its strategy to turn Game Pass into the axis of its business failed to achieve the expected results.The company faces the biggest hardware crisis in its history and announced a profound restructuring that includes the dismissal of 3,200 workers and the departure of five video game studios.The decision transcended this Monday through a Bloomberg report.According to that media, Xbox Executive Director Asha Sharma communicate…
Microsoft cuts 4,800 jobs – especially on Xbox. The gaming division is struggling with low margins and a hardware crisis. What this means for players.
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