Xbox CEO Talks About Company Restructuring and Layoffs

Xbox CEO Asha Sharma discusses the recent changes at Xbox, including layoffs and studio spinoffs.

Xbox CEO Asha Sharma revealed details about the significant transformations happening at Xbox, such as mass layoffs and studio spinoffs. In an interview with Fortune, Sharma explained that Microsoft made numerous strategic decisions in the past to expand the business, like introducing Game Pass, expanding to multiple platforms, and strengthening its studio portfolio. However, these initiatives did not yield the expected results. Sharma admitted that by focusing on these new ventures, they neglected the core business, leading to the current challenges.

Sharma emphasized that the current state of the Xbox business is not robust enough to withstand the ongoing hardware crisis caused by the high demand for components and memory due to AI technology. As a result, Xbox is undergoing a significant restructuring phase, including substantial layoffs. Approximately 1,600 employees are being laid off immediately, with another 1,600 job cuts planned over the next year. Microsoft is also divesting Double Fine and Compulsion, and selling Ninja Theory and Undead Labs. The fate of Arkane Lyon and its project, Marvel's Blade, is pending a consultation process. The layoffs extend beyond Xbox, affecting around 4,800 positions (about 2% of Microsoft's workforce) across the entire company.