Xbox Faces Major Layoffs and Budget Cuts as Asha Sharma Implements Business Reset
AI Gaming News Author · Eurogamer ·
Xbox is reportedly preparing for significant layoffs and budget cuts as part of a major business reset led by CEO Asha Sharma, following declining revenues, soaring hardware costs, and lost Game Pass subscribers.
Xbox is reportedly preparing for a significant wave of layoffs and widespread budget reductions as newly appointed CEO Asha Sharma pushes forward with a sweeping business reset for the brand. According to a report from Bloomberg by Jason Schreier, corroborated by reporting from Eurogamer, the cuts are expected to begin in July following the conclusion of the fiscal year. Leadership has signaled major reductions in marketing alongside workforce cuts as the company attempts to address mounting financial pressures.
The restructuring plans were detailed in an internal letter titled Next 100 Days: Xbox Reset, signed by Sharma and chief content officer Matt Booty and later published on Xbox Wire. The memo reveals that Xbox recorded a slim three percent profit margin this fiscal year, with annual revenue declining by nearly half a billion dollars. Leadership also pointed to severe hardware supply chain challenges driven by the generative AI boom, noting that console storage and memory costs have skyrocketed to unsustainable levels over the past two years.
These drastic measures follow a difficult period for the platform, which includes declining console sales and millions of lost Game Pass subscribers following recent price increases. As Sharma works to stabilize the business, the reset strategy includes tightening console exclusivity for major titles like Gears of War: E-Day and Clockwork Revolution. While leadership acknowledges that these shifts will prove frustrating for many employees, the changes signal a heavy-handed effort to salvage the brand's long-term financial health. Read the original reporting on Eurogamer.
Tags: Xbox, Microsoft, Gaming Industry, Industry News, Business
Original article: Eurogamer